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Recently, Dalian Commodity Exchange (DCE) announced Jilin Tiancheng Corn Development Co., Ltd. as a new benchmark designated delivery factory warehouse, Shandong Fukuan Bioengineering Co., Ltd. and Linqing Deneng Gold Corn Biotechnology Co., Ltd. as new non-benchmark designated delivery factory warehouses. The premiums and discounts for warehouse differentials are RMB 95 / ton. So far, DCE has its corn starch delivery warehouses increased to 14, doubled compared with the warehouses number in the early period of listing. Continuously increasing delivery warehouses and their relatively balanced distribution in producing and selling areas provided powerful guarantee for the steady operation and functioning of the corn starch futures that were active constantly last year.
In the early period of listing, DCE set up 7 delivery warehouses in two provinces, Jilin in Northeast China and Shandong in North China in accordance with the distribution of the corn deep processing industry and the direction of trade flows. Since last year, with the impact of the new policy for temporary storage of corn and expectation for the market-oriented policies, market players have kept proactively using the corn and corn starch futures to manage risks and the liquidity of the two futures products increased. Last year, the trading volumes of the corn futures and the corn starch futures reached 42.0902 million contracts (unilateral, the same below) and 27.0537 million contracts respectively, becoming active products in China’s futures markets. The related entity enterprises expected more delivery warehouses contributed to further facilitating risk management and physical delivery, when the enterprises participation increased, market size expanded and volatility risks intensified in the corn and corn starch markets. Based on the impact of the industrial policies and market development and enterprises demand, DCE analyzed the characteristics of the corn starch market, surveyed and researched on the distribution of production and sales, the price relation among different areas and the characteristics of goods trade. Then, DCE adjusted to adapt to the spot market situation, meet the demand of spot enterprises and requirements for market development. In April 2015, DCE set up 3 new delivery factory warehouses respectively in Jilin, Liaoning, Shandong and a new delivery warehouse in Shandong. Recently, DCE continued to add two delivery warehouses in Shandong and one in Jilin, making the number of delivery warehouses in Northeast China and North China (Shandong) reach 6 and 8 respectively. The total number of the delivery warehouses has amounted to 14, including 5 delivery factory warehouses in Northeast China and 7 in North China (Shandong Province).
A market analyst said that current distribution of the delivery warehouses for corn starch was in line with the capacity layout of corn starch, the supply and demand pattern of spot market and the demand of the entity enterprises. And more delivery warehouses responded to the demand of market development and facilitated integration among market functioning, futures delivery and spot goods operation. Therefore, supply-side structural reform on corn was propelled.
At present, DCE is still conducting market survey and research, standing by to increase the number of delivery factory warehouses and expand the scale of largest warehouse receipt registration in due course. The survey and research also pave the way for DCE to better serve entity industry and prepare for the expansion of the corn market. Meanwhile DCE is studying on promoting the enrichment and improvement of the hedging products system throughout the industry chain.
