Since the end of last week, the purchase price of flour milling enterprises that hold the sole right to speak in the wheat market has fallen unexpectedly, and at present, the mainstream purchase price is basically around 2,600 yuan/ton, and the weak characteristics of the wheat market are very clear. Judging from the pre-purchase transactions of wheat in 2024 in some regions, the market price of wheat has basically achieved new docking.
Judging from the above two detailed statistical charts, the local reserves of Shandong Province, the main wheat producing area and also belong to the production and marketing balance area, have pre-purchased 78,400 tons of wheat in 2024 so far in April, with an average transaction price of 2658.97 yuan/ton, showing a trend of high before and low after, and the transaction rate is also very cooperative with the high before and after high. Compared with the average price of 45,000 tons of pre-purchase transactions in March, 2692.62, it fell by nearly 34 yuan/ton, and the turnover rate increased significantly, which clearly means that with the weather conditions exceeding expectations, the price expectations of the entire market players for the new season wheat not only began to decline, but also from the perspective of pre-purchase quantity and transaction rate, this expectation is also relatively consistent.
We then look at the following statistical chart of the wheat pre-purchase transaction situation in April from the main wheat producing area and the traditional output area of Jiangsu Province, although the number is not much, the quantity is only 30,000 tons, and the average transaction price is lower than that of Shandong, which is in line with the perennial price difference logic, which also confirms that the expectations of wheat market players in different regions for the opening price and operation trajectory of wheat in different regions are consistent. However, judging from the transaction situation and discount rate, market players still have concerns.
The author thinks that this is not necessarily the case, there are several variable factors in the later stage of the wheat market price, and if one of them is conformed, it is possible to trigger a rebound, if it meets a number of factors, the rebound will be stronger, and even the possibility of reversal is not ruled out, although this possibility is relatively slim.
First, the market price of corn has risen to a certain extent
The pull of corn market prices, from the perspective of price differences, also makes the bottom of the wheat market price lose support, so whether the corn with a clear bottom can rise from the bottom next, or even do not need to rise sharply, will narrow the two-week price difference, so that the consumption channels of wheat can be broadened.
2. Factors changing weather conditions
Combined with the above central reserve grain and the above pre-purchase statistics and transactions of wheat in some regions in the 2024 season, the reason why market players are optimistic about the expectations of the new season wheat is consistent is that the weather conditions and production conditions are very normal so far, but from the perspective of discount and transaction rate, it is also obviously reserved, which also reflects the concern that there are still variable factors in the weather conditions in the later period, after all, the example of sudden weather changes in the 2023 wheat season is still very vivid. It not only affects the market price of wheat in the new season, but also has a greater impact on the market price of old wheat.
3. Although the number of grain reserves at all levels has not exceeded the normal year, and some regions have even decreased, in the overall agricultural product market environment is relatively weak, and the wheat market consumption channel is also very single, this kind of high-density concentrated delivery also poses a very obvious pressure on the current wheat market and sentiment. The rotation time of the central grain reserves in 2024 is advanced, and the overall rotation progress is also more than that in 2023, so in the current weak market environment, combined with the sluggish turnover rate and transaction price, not to mention the suspension of the rotation of the delivery, even if there is a certain degree of significant shrinkage, it is believed that the supply and demand structure of wheat in the entire market and market confidence will have a certain boost, of course, the possibility of this factor triggering the reversal of the wheat market does not exist.
Based on the above analysis, the author thinks that the current wheat market has certain signs of collapse, but it is still too early to draw a conclusion.
(Source: Ningxia, Special Analyst of Jiangsu Grain and Oil Commodity Exchange Market)