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Since the summer harvest, although wheat market prices have fluctuated frequently, they have generally operated within a reasonable range limited by policy expectations. It is expected that wheat prices will remain stable in the future, with little probability of significant fluctuations, and market opportunities will still have clear stage characteristics.
Since November, the autumn harvest and planting in some areas of the production area are coming to an end, and the purchase and sales of wheat at the grassroots level are gradually recovering. At the same time, wheat from central and local storage has been gradually put into the market, increasing the supply of grain sources. The temporary tight supply situation in the wheat market has gradually eased, and wheat prices are stable with weak fluctuations.
Market monitoring shows that the current entry price of second-class ordinary new wheat for flour milling enterprises in the main production areas is 2430-2490 yuan/ton, with some prices dropping by 10 yuan/ton on a weekly basis. The fluctuation of the wheat market has put traders in a dilemma: they are worried about the price drop before the new year, and they are also worried that current sales will miss the opportunity for subsequent price increases.
The temporary tight supply situation has eased
According to market feedback, the circulation of wheat in the main production areas has been good recently, but the demand for flour processing by flour enterprises is not strong. In this context, manufacturers often adopt a strategy of on-demand procurement, and some quotations have experienced narrow downward adjustments due to an increase in the amount of goods received in front of the door. This trend reflects both the subtle changes between market demand and supply, as well as the cautious attitude of participants towards future trends.
At present, the mainstream import price of new wheat for flour milling enterprises in Hebei is 1.225~1.23 yuan/jin, Shandong is 1.213~1.255 yuan/jin, Henan is 1.226~1.248 yuan/jin, Jiangsu is 1.23~1.24 yuan/jin, Anhui is 1.235~1.245 yuan/jin, and there is a slight correction of around 0.005 yuan/jin in some areas.
Since the end of October, the price of wheat has been adjusted again. On the one hand, the increase in wheat production has eased the temporary tight supply situation in the market; On the other hand, downstream flour sales are not smooth, and flour milling enterprises are cautious in purchasing wheat. The weak supply and demand have led to a moderate adjustment in wheat prices. However, the recent cautious correction in wheat prices also reflects the difficulty for flour milling companies to continue lowering prices, and the strong willingness of grain holders to raise prices. It is expected that the space for wheat prices to continue to decline in the short term is limited.
The price of high-quality wheat remains stable, with a current purchase price of 2700 yuan/ton for "Gaoyou 2018" in Hebei, 2590 yuan/ton for "Jinan 17" in Shandong, and 2610 yuan/ton for "Zhengmai 366" in Henan. There has been little change in the weekly ratio.
It is understood that there is still a gap between domestically produced mainstream strong gluten wheat varieties and foreign wheat in terms of protein content and extensibility, and flour milling enterprises producing strong gluten flour still have a strong demand for imported wheat. Recently, it was reported that China has returned to the Australian wheat market and shown strong interest in the newly harvested flour wheat. It is said that five batches of about 300000 tons of Australian flour wheat have been purchased and shipped from December to January next year.
The intention of stabilizing the market on the policy side is still evident
On November 5th, China Grain Reserves Corporation Beijing Branch added two new wheat storage points; On November 8th, the Jiangsu branch added one new storage point. According to statistics, as of now, China Grain Reserves Corporation has launched 459 additional storage and acquisition points in the main wheat producing areas.
Entering November, the number of storage points of China Grain Reserves Corporation continues to increase, indicating that the policy's support and regulatory intentions for the market are still evident, which also makes the bottom of wheat prices resilient. It is also reported that in response to the recent decline in wheat prices, the China Grain Reserves Corporation (Sinograin) continues to increase its collection and storage points. At the same time, the Beijing branch also has operations to replenish its inventory and purchase wheat for the year 2024.
On November 4th, Guangzhou Grain Group Co., Ltd. commissioned the procurement of 6100 tons of high-quality white wheat produced in Hebei, Jiangsu, and Shandong in 2024. All transactions were completed with a base price of 2830 yuan/ton and a transaction price ranging from 2770 to 2820 yuan/ton. On November 5th, Huilai County Reserve Grain Management Corporation in Jieyang, Guangdong Province commissioned the procurement of 6280 tons of wheat produced in Jiangsu, Shandong, Henan, Hebei, and Anhui in 2024. All transactions were completed with a base price of 2720 yuan/ton and a transaction price of 2720 yuan/ton. On November 6th, the Shijiazhuang and Zhangjiakou direct warehouses of China Grain Reserves Corporation Beijing Branch traded wheat at a fixed price, purchasing 11650 tons of wheat for 2024 production at transaction prices of 2500 yuan/ton and 2510 yuan/ton, respectively. On November 7th, Yihai Kerry (Lanzhou) Food Industry Co., Ltd. bid to purchase 2000 tons of wheat for 2024, with a base price of 2600 yuan/ton and transaction prices of 2595 yuan/ton and 2600 yuan/ton, respectively. On November 8th, Guangdong Grain Reserve Management Group Co., Ltd. commissioned the purchase of 12500 tons of domestically produced wheat, and the actual transaction was 3500 tons, with a bottom price of 2690 yuan/ton and a transaction price of 2690 yuan/ton; Shandong Province's provincial reserve (wheat) Lubei Warehouse has a two-way purchase and sales volume of 2845.31 tons, which failed the auction. The purchase price for 2024 wheat is approximately 2500 yuan/ton.
There are increasing signs of reserve sales investment
Recently, auctions and releases of reserve grain at all levels have been carried out one after another, and some targets have been able to be sold at prices similar to the spot market level, even though the bottom selling price has been lowered. However, there have also been reports that the number of sales and releases of reserve wheat has gradually increased in recent days, leading to increased market pressure. On November 8th, there was a widespread phenomenon of unsold wheat in Henan, Hebei, and Shandong provinces.
Preliminary statistics show that from October 28th to November 1st, there were a total of 11 wheat auctions held by China Grain Reserves Corporation, with a total amount of 77868 tons sold and a transaction volume of 43847 tons. The transaction rate was 56.3%, and the transaction price ranged from 2380 to 2575 yuan/ton. From November 4th to November 8th, there were a total of 23 auctions held by China Grain Reserves Corporation, with a total amount of 247983 tons released.
On November 4th, China Grain Reserves Corporation Shandong Branch auctioned 17504 tons of first-class wheat produced in 2021, with a transaction volume of 12492 tons and a transaction rate of 71%; The starting price is 2450 yuan/ton, and the average transaction price is 2450 yuan/ton. On November 5th, China Grain Reserves Corporation Beijing Branch auctioned 32328 tons of wheat produced in 2018-2021, with a transaction volume of 3306 tons and a transaction rate of 10%. The bottom price was 2430 yuan/ton. On November 6th, Huainan City level reserve bidding sales of 5391.14 tons of mixed wheat produced in 2021 were held at a base price of 2300 yuan/ton, with transaction prices of 2300 yuan/ton, 2310 yuan/ton, and 2320 yuan/ton, respectively. On November 7th, China Grain Reserves Corporation Shanxi Branch auctioned 12110 tons of first - and second-class wheat produced in 2018, 2019, and 2023, with a transaction volume of 6272 tons and a transaction rate of 52%; Jiexiu Warehouse was traded at a bottom price of 2400 yuan/ton. On November 8th, China Grain Reserves Corporation Henan Branch sold 8120 tons of wheat produced in 2020-2021, with a transaction volume of 5820 tons and a transaction rate of 72%; The starting price is 2460 yuan/ton, the average transaction price is 2461 yuan/ton, and the transaction price ranges from 2460 to 2465 yuan/ton.