Key points of attention before and after the launch of the new season peanuts

Generally, our country's new season peanuts are harvested and marketed in mid-August. This year, due to the delayed planting of spring peanuts in Henan province and the low accumulated temperature during the subsequent growth period, there is still not a large number of new season peanuts on the market. At present, the pricing of ZCE's peanut futures is still composed of the price of old peanuts plus a certain premium. After the listing in the future, how the price of peanut futures will operate, and the supply and demand of peanuts in the new season, are important points worthy of investors' attention. This article will sort out this.

1. New crop supply side

1.1 The impact of heavy rain in Henan province on the quality and yield

From July 20 to 21 this year, there was a heavy rainstorm in central and northern Henan procince. The local area of Zhengzhou has accumulated rainfall of 500-657 mm, and some areas of Xinxiang, Kaifeng, Zhoukou, Jiaozuo and other places also saw extremely heavy rains of 250-350 mm. There are a total of 10 national meteorological observatories in Henan Province whose daily rainfall exceeded the historical extreme value since meteorological records. It was learned at a subsequent press conference that according to the Henan Provincial Department of Agriculture and Rural Affairs, as of August 3, 14.7 million acres of crops had been damaged in the province, of which 9.7 millionacres were damaged, and 5.7 million acres had no harvest.

According to the characteristics of the peanut itself, it needs more water during the flowering and needle period (around July), while the pod period (around August) is the most water-required period. Generally, it is advisable to keep 60%-70% of the maximum water holding capacity of the soil, so part of the rainfall is beneficial to the growth of peanuts. However, if the peanut plant is flooded by standing water for 2-3 days or more, it will cause insufficient oxygen, and the root system will have difficulty breathing. Eventually, the rotten root will die, leading to no harvest.

The impact on peanut quality will be greater than the impact on yield. From the perspective of planting area, Henan peanuts are mainly concentrated in Nanyang and Zhumadian, which together account for about 50%. The heavy rainfall has little impact on these two areas, and even proper rainfall has certain benefits for their growth. According to data, the area of Xinxiang, Zhoukou, Kaifeng, Jiaozuo, Anyang, Hebi and other areas that were seriously affected this time accounted for 20%-25% of Henan Province’s planting area, which is converted into the national peanut area, accounting for about 6%-7.5%. Of course, the area affected by the disaster is not completely no harvest. According to the comparison of the area affected by the disaster and the area with no harvest, it is roughly estimated that the impact on the national peanut output is within 3%. A similar conclusion can be obtained from another dimension. According to the Henan Daily, as of July 24, the area of crops affected in Henan Province was 13.07 million acres, of which 8.67 million acres of corn, 100 thousands acres of rice, 480 thousands acres of soybeans, and 1.81 million acres peanuts were affected and the other 2.01 million acres. Based on the proportion of peanuts, the final estimated peanut affected area will be about 2 million acres, accounting for 2.8% of the national sown area. The impact on output will be even lower when converted into yield.

Of course, the impact of output is one aspect, and the impact of subsequent rain on the quality of peanuts also needs investors' attention. If the drainage is not drained in time, it will cause peanut root diseases to rot. Excessive rain during the growth period will cause excessive growth of peanut plants, which will affect the yield and quality of peanuts. Therefore, this heavy rain in Henan has limited the reduction in peanut production across the country, but the quality problem after harvest is worthy of attention.

1.2 Pay attention to rainfall during harvest and related issues of aflatoxin

It is also the characteristic of the peanut itself, which is susceptible to infection by Aspergillus flavus under high temperature and high humidity. Especially during the harvest period, the moisture of the freshly harvested pods is between 50% and 60%. Generally, field drying is required to evaporate the moisture to within 9%, which can meet the long-term storage standard and also meet the standard delivery products of ZCE Standards. If the harvest period is overcast and rainy, it will easily cause the problem of excessive aflatoxin.

The hygienic requirements and inspection methods of peanuts stipulated by ZCE are in accordance with the "National Standard Peanuts of the People's Republic of China" (GB/T 1532-2008), "The National Standard Oil Peanuts of the People's Republic of China" (NY/T 1068-2006) and other documents implement. The relevant guidance documents stipulate that the aflatoxin B1 of peanuts for oil should be ≤5μg/kg, and the total amount of aflatoxin (B1, B2, G1, G2) should be ≤15μg/kg.

The same piece of land, but due to different climates, the aflatoxin levels for two consecutive years are very different. According to the data of Ding Xiaoxia’s doctoral dissertation in 2011, the content of Aspergillus flavus B1 in the production areas of the Yangtze River Basin was 6.29 and 34.16μg/kg in 2009 and 2010 respectively. And the total amount of Aspergillus flavus was 6.82 and 40.34μg/kg respectively. The northern production area the content of Aspergillus flavus B1 was 0.10 and 2.24μg/kg respectively. It can be found that the difference between Aspergillus flavus is 5-20 times in two consecutive years, and the areas that may meet the national standards in the previous year may be seriously exceeded in the next year. The climate, especially the rainfall during the harvest period, has a greater impact on this indicator.

The content of aflatoxin in the northern region is lower than that in the southern region; the content of aflatoxin in the eastern region is lower than that in the central region, and the pollution caused by aflatoxin in the Yangtze River Basin and the southern region is the most serious. Zhang Xing proposed in his 2017 paper that the distribution of Aspergillus flavus in Peng'an in Sichuan, camphor soil in Jiangxi and peanuts in the Yangtze River Basin is the most. while in Fuxin, Liaoning in the northeast, and Jiyang in Shandong in the north, Aspergillus flavus is less distributed and harvested in the soil. And the number of Aspergillus flavus colonies in peanut samples was significantly higher than 30 days before harvest. Cheng Guo and others conducted a census and analysis of peanut aflatoxin field pollution in 10 main peanut producing areas in Shandong, Hebei, Liaoning, Jilin, Inner Mongolia and Henan in 2017, and found that the two major northern peanut owners in Hebei and Henan provinces that year the positive rates of peanut aflatoxin in the production areas reached 100% and 50% respectively. The aflatoxin field pollution levels in the flower production areas of Huangdao, Jiaozhou and Jimo were higher than that of Jiaozhou, with a positive rate of 40%. Jimo and huangdao followed, with a positive rate of about 30%. In 2017, no peanut aflatoxin pollution was detected in the three districts of Liaoning, Jilin and Inner Mongolia.

Therefore, in general, the future rainfall in Henan, Shandong, Hebei and other places will be very important and will affect the number of deliverables. According to the current weather forecast, during the harvest period in mid-to-early September, the rainfall in Shandong and Henan may be higher than the same period, while the rainfall in Hebei is expected to be the same or slightly lower than the same period in previous years, and the northeastern region is relatively dry.

2. Demand side of new crops

2.1 Peanut oil weakened, oil factory profits reduced

According to Zhuochuang Information, as of the week of August 12, the average price of crushed first-grade peanut bulk oil in Shandong was 15,450 yuan/ton, down 0.64% from the previous month, and there is a lot of room for negotiation. Compared with the previous level, which was close to 19,000 yuan/ton, the decline was significant. According to feedback from some oil companies, the delivery of peanut oil products is not very good this year. Due to the gradual control of the epidemic, consumers have also chosen to eat out more than last year. As the bulk of household oil, the demand for peanut oil has been affected suppression. In terms of profit, although the price of raw materials peanut has also declined, it is not as large as the decline in peanut oil. As of the week of August 12, the theoretical crushing profit of the peanut oil plant was 428.5 yuan/ton, a decrease of 9.12% from the previous month, and it was also lower than that of 2017 and 2018 at the level of the same period . Although profit extraction was still positive, the gradual weakening trend is expected to also affect the enthusiasm of oil plants for subsequent acquisitions.

2.2 Imports in the first half of the year are huge and need to be digested

Due to the increase in domestic oil demand, our country's peanut imports have increased year by year. According to customs data, from 2017 to 2018, the average annual import of peanuts was about 180,000 tons. In 2019, the import volume reached more than 450,000 tons. In 2020, the import volume (peanut kernels + peanuts) exceeded 1 million tons, accounting for output about 6%. From January to June of 2021, our country imported a total of 800,300 tons of peanuts, increase of 14.2%. It is expected that in 2021, our country's imported peanuts will hit a record high.

In addition, in terms of time, due to the domestic policies of African countries and the tension of shipping containers, the arrival of African peanut kernels was delayed this year, and a large number of them arrived in Hong Kong only from April to May. Superimposed oil plants gradually entered the off-season for acquisitions after June, so this part peanuts still needs time to digest. From the perspective of relative price, imported rice also has a certain price advantage over domestic rice, and it may still squeeze the peanut market in the new season.

Not only the import volume of peanuts hit a record high, the import volume of peanut oil in the first half of the year was also extremely high, which curbed the demand for raw peanuts. According to customs data, from January to May 2021, my country imported a total of 197,000 tons of peanut oil, a year-on-year increase of 169.4%. In 2020, my country imported 269,000 tons of peanut oil. If calculated according to the oil yield of 45%, it will squeeze out about 440,000 tons of peanut demand. Under the background that peanut oil itself is lightly sold, a large amount of imported peanut oil has undoubtedly increased the pressure on the market. In the short term, the pressure on peanut raw material and finished product inventories in oil plants needs to be digested. In the medium term, attention should be paid to the background of price cuts. Can market demand be rekindled?

In addition, in terms of time, due to the domestic policies of African countries and the tension of shipping containers, the arrival of African peanut kernels was delayed this year, and a large number of peanuts arrived at the port in April-May. Superimposed oil plants gradually entered the off-season for acquisitions after June, so this part Peanut kernels still need time to digest. From the perspective of relative prices, imported peanut kernels also have a certain price advantage compared with domestic peanut kernels, which may still squeeze the peanut market in the new season.

Not only the import volume of peanuts hit a record high, the import volume of peanut oil in the first half of the year was also extremely high, which curbed the demand for raw peanuts. According to Customs data, from January to May 2021,our country imported a total of 197,000 tons of peanut oil, a year-on-year increase of 169.4%. In 2020, our country imported 269,000 tons of peanut oil. If calculated according to the oil yield of 45%, it will squeeze out about 440,000 tons of peanut demand. Under the background that peanut oil itself is lightly sold, a large amount of imported peanut oil has increased the pressure on the market undoubtedly . In the short term, the pressure on peanut raw material and finished product inventories in oil plants needs to be digested. In the medium term, we need to pay attention to whether the demand for peanut oil can be rekindled in the context of price cuts.

After the listing of new peanuts, attention was paid to seasonal fluctuations, and the pricing weight of new peanuts became stronger. Among the main producing areas, generally, Henan new peanuts are on the market earlier, and due to the limited supply in stages, the price is often much higher than that of the old peanuts. And wait until mid-September when the new peanuts are listed in large quantities in Shandong and other places. The price of peanuts will fall again. In this case, investors should note that although the launch of the new peanuts is delayed this year, it is expected that there will still be sporadic new peanuts at the end of August and early September. There may be more cases where the price is based on quality, and the overall price quotation is relatively chaotic, with false highs. The potential possibility of the market cannot rule out a price shock in the short term. However, after a large number of domestic peanuts are listed, the price will under obvious pressure. In 9 years of the past 11 years, the spot price of peanuts in September fell, with an average drop of over 4.4%. Based on this, the support of warehouse receipt costs on the disk gradually weakened at the end of September, and price will gradually transition from the pricing system of old peanuts plus new peanuts to the new peanuts pricing system.