Investment Rating - The report indicates a stable recovery expectation for corn prices due to tight annual supply and selling pressure from farmers [1]. Core Insights - The corn market is experiencing a balance between selling pressure and tight supply expectations, leading to a stabilization in price forecasts [1][5]. - The report highlights that the average corn price in China as of the end of February 2025 was 2218 CNY/ton, showing a month-on-month increase of 58 CNY/ton but a year-on-year decrease of 247 CNY/ton [9]. - The USDA has continuously revised down global corn ending stocks, predicting them to reach a ten-year low, which serves as a core support for corn prices [28][30]. Market Review - February corn prices showed a fluctuating trend, supported by tight supply expectations but pressured by high external prices and farmer selling pressure [5]. - The selling progress of farmers is reported at 70% nationwide as of February 27, 2025, which is 8% faster year-on-year [19]. - The average inventory of feed enterprises increased by 9.04% year-on-year, indicating a seasonal buildup [66]. Supply Market Analysis - The domestic corn supply forecast indicates a tightening trend, with initial stocks slightly higher, which mitigates the decline in supply [13]. - The report notes a decrease in corn imports, with a total of 1377 million tons imported in 2024, down 1337 million tons year-on-year [23]. - The supply-demand balance table shows a tightening expectation for the corn market, with limited adjustments anticipated in the balance sheet [69]. Demand Market Analysis - The report indicates a slight decrease in feed production, with a total of 316 million tons produced in 2024, reflecting a 0.88% year-on-year increase [44]. - The overall demand is expected to remain stable, supported by rigid consumption, although marginal improvements are insufficient [68]. - The report highlights that the profitability of pig farming has returned to breakeven levels, indicating a stable livestock market [51]. Options Market Analysis - In February, the average daily trading volume of corn options was 91,560 contracts, an increase of 21,625 contracts month-on-month [74]. - The report suggests an options trading strategy around the price range of 2220-2380 CNY for the corn May contract [78]. - The report recommends that upstream enterprises consider selling out-of-the-money calls to offset income losses, while downstream enterprises should look at buying at-the-money calls for cost locking [132]. Seasonal Analysis and Price Outlook - The report notes that corn prices tend to rise in February and October due to seasonal factors, while July and November are typically associated with price declines [92]. - The price outlook for the corn May contract is expected to fluctuate between 2220-2380 CNY, with a focus on the tightening supply and selling pressure [94].