Since New Year’s Day, with the release of a series of favorable data in the United States, the market has regained confidence in the US economic outlook. With the rising of risk appetite, the US dollar also began to rebound sharply before the holiday. The strength of the US dollar is undoubtedly a sudden halt to the once skyrocketing commodity futures. In addition to the current lack of speculative hot spots and tight funding, commodities have recently experienced a certain degree of correction. However, for corn with better fundamentals, we believe that under the current situation, buying and holding for a long time will be a good choice.

Commodities at home and abroad are at historically high levels. Faced with the pressure of adjustment in the context of the strong US dollar, the overall fundamentals of agricultural products are still relatively good, and the downside will be very limited. Particularly, the tight supply and demand of corn has very long-term investment value.

From the policy side, the state regulation and control directly restrained the growth of agricultural products, but from the nature of the goods, the final decision on the price of goods is still the relationship between supply and demand. Although the weather conditions during the corn growing season in 2010 were good, China's corn production in 2010/2011 had a recovery growth. However, the rapid growth in rigid consumption in 2010 also led to a large amount of inventories, and the country has a large stockpile demand. China's corn supply and demand are relatively tight.

On the other hand, with the growth of domestic consumer demand, China's corn import policy has gradually relaxed, and the import volume is expected to expand, which will directly increase the pricing power of the CBOT market and boost the price of corn, thereby stimulating the rise of the domestic market. According to a report from the U.S. Department of Agriculture, U.S. corn’s ending stock consumption was lower than it was in 15 years. The "Moon Fuel Alcohol Subsidy Deferment Proposal" passed by the US Congress will further increase fuel ethanol corn use. More importantly, the blending ratio of US fuel ethanol still has room to increase. At present, the United States Biofuels Organization and agricultural organizations are actively advising the government to increase the current 10% blending ratio to 15%. According to the current level of technology, the blending ratio will increase by 1%, and the demand for corn will increase by at least 10 million tons. This means that the demand for corn still has a large room for upward adjustment. Coupled with the possible effects of La Niña weather, the global corn supply situation is not optimistic.

China's aquaculture industry has continued to grow steadily, and meat and egg production has steadily increased since 2007-2008. According to the data, pork production in China will increase by 1.1 million tons to 50 million tons in 2010, and will reach 51.5 million tons in 2011. In 2010, China's chicken meat production will increase by 450,000 tons to 12.55 million tons, and in 2011 it will reach 13 million tons. As the process of industrialization in China continues, the consumption of meat and eggs in China continues to increase steadily. Demand for deep-processing companies' corn is also increasing, and both have formed strong support for corn prices.

As the U.S. Department of Agriculture will announce the first monthly supply and demand report for 2011 on the 12th, the current agricultural product market has a strong wait-and-see mood. However, based on international and domestic corn supply and demand conditions will remain tight in 2011, there is no significant downside at the high consolidation, corn has a large buying value. It is recommended that investors buy corn on a bargain and hold it for a long time.