Food prices have recently risen sharply, with maize and wheat market prices showing high momentum. The spot price of corn hit 1.6 yuan, and the starting price of 1.57 yuan for wheat from local reserves was also not sold. The market is generally optimistic that food prices still have room to rise in the future.
The tight supply of the wheat market is mainly due to the fact that the production capacity of wheat in the main producing areas has been affected, the proportion of high-quality wheat is small, the market is generally optimistic about rising prices, and grain holders also have a wait-and-see attitude towards selling at high prices. At the same time, the recent rainy weather in the north has increased the difficulty of purchasing and selling at the grassroots level, and the insufficient supply of spot wheat has further supported the upward trend of wheat prices.
At present, in the domestic wheat market, local reserve banks and grain enterprises are still bidding for replenishment operations, due to strict requirements for the quality of wheat entering the warehouse, the supply of wheat that meets the standards is insufficient, so the bidding starting price of some local reserve wheat continues to rise. For example, the starting price of wheat in some parts of Yunnan has reached 1.75 yuan / jin. However, since Yunnan is not a major wheat producing area, it has little impact on the market. For Shixian County, Hebei, the starting price of wheat bidding has been rising recently, and it has reached 1.57 yuan / jin, but it is still auctioned. This further boosted expectations for continued gains, with grain traders optimistic but cautious about the future of wheat.
On the other hand, due to the high price of grain depots, the market generally holds a reluctance to sell, and the wheat procurement level of milling enterprises is also low. However, at the end of August, the replenishment demand of downstream traders of flour enterprises became increasingly strong, the demand for flour from food factories also increased significantly, the production start of enterprises increased, and the pressure of raw grain inventory gap increased sharply. This forced millers to raise prices to boost supply. At present, the price increase of domestic milling enterprises for wheat is between 0.5 and 2 cents / jin, the quotation of wheat-producing areas is about 1.47 to 1.55 yuan / jin, and the average price has increased to 1.513 yuan / jin. As bullish sentiment remains high, downstream flour consumption demand remains strong at the end of August and early September, and wheat prices are expected to continue to shift upward, the price gap between wheat and corn will gradually narrow, and feed substitution benefits will weaken. However, as the harvest of new corn begins one after another, traders may increase their wheat stocks and flour consumption will gradually fall, and prices may trend downward.
In the corn market, the recent trend continues to rise, but the trend of the Northeast and North China and Huanghuai markets is clearly differentiated. In the northeast, corn quotations were relatively stable and the market rebound momentum was insufficient. However, in the North China and Huanghuai markets, corn spot quotations have risen significantly, for example, the listed quotations of some enterprises in Shandong have risen to 1.595 yuan / jin, and the price is about to exceed 1.6 yuan / jin.
From the perspective of corn spot stocks, at the end of August, the supply of grain corn was insufficient, and in mid-to-late September, summer corn in North China and Huanghuai began to be marketed one after another. At present, there is still some surplus grain in the northeast, and some institutions predict that the production capacity may be between 12 million and 15 million tons. Since the northeast region has held four consecutive rice auctions, and each time there has been a premium transaction, this is certain positive news for spot corn, and grain holders have a strong attitude towards sales. However, the purchase and sales of corn in the northeast region are relatively low, feed enterprises have sufficient rice replacement supply, while local deep processing enterprises have relatively safe inventory, spot corn quotations are relatively stable, and the mainstream price is between 1.29 and 1.37 yuan / jin.
In North China and Huanghuai, spring corn is less marketed and limited in quantity, making it difficult to improve the pressure of corn supply, and local surplus grains are also at a low level. Enterprises mainly rely on supply from the northeast, but due to the bullish expectations of traders and rising logistics costs, coupled with the continuous rainy weather in many parts of the northeast, the difficulty of corn transportation has increased, and the arrival of domestic imported corn has decreased, and the inventory gap of local enterprises has begun to appear, which has pushed up prices and stimulated demand.
In terms of corn consumption, as the price difference between wheat and corn narrowed, feed enterprises in North China and Huanghuai markets began to resume corn procurement, while downstream sales of deep processing enterprises also gradually improved, and the inventory pressure faced by enterprises increased sharply.
In general, under the interweaving of long and short factors, I personally predict that the price of spot corn in the northeast will remain stable until the new crop corn is on the market, and the grain inventory of some enterprises may increase the price slightly. In North China and Huanghuai markets, the tight supply of corn is still significant, spot listing quotations will continue to rise, and the price of corn in some enterprises in Shandong may rise to more than 1.6 yuan / jin.
What do you think about the above? The above is only a personal opinion.