Since the second decline in wheat and the fall out of the sky again, the wheat market has been completely chaotic. The current wheat market is not at the bottom, and it is even more afraid to speak out, and it is deeply shrouded in pessimism.
And now the market is more like a frightened bird, any wind and grass will make people nervous.
And wheat seems to have become less rainy in recent days after the storm, and there have even been sporadic slight increases, which has excited the market.
Is wheat going to stop falling and rising?
I think I can answer this in four words: it's too early.
Like we said before, don't look at corn falling into a mess, but in fact wheat is much more complex than corn.
So, what's so complicated about wheat?
First, don't look at the wheat falling fiercely, but the bullish sentiment of wheat is not low.
Although it is said that wheat and corn are facing a return situation, there are not many people who say that corn has fallen to the point that no friends believe it, but there are not many people who believe in wheat.
On the one hand, the reason is that everyone is still intoxicated with the market of 1.6 yuan/kg of wheat at every turn, coupled with the bad rain in the wheat harvest last year, the quality of wheat has declined rapidly, and a large number of sprouts have been produced, making high-quality wheat more scarce.
On the other hand, wheat is a ration, and under the premise of food security, the market generally believes that the policy attention of wheat will not be lower than that of corn.
So the bullish sentiment for wheat is actually relatively strong, but as the saying goes, if the expectations are too high, the greater the disappointment, so the pressure on the wheat market is much higher than that of corn.
Second, the decline in wheat seems to be a game between supply and demand, but it is actually a secret contest among flour companies.
The decline of wheat in this way is generally believed to be due to the continuous release of wheat under the policy and the sluggish downstream demand, which led to oversupply and wheat decline.
But this is only a superficial phenomenon, and behind it is actually a secret competition between flour companies.
First of all, the cost and quantity of wheat in the inventory of flour enterprises are different, especially in the downward market, the cost has become an important weight for flour enterprises.
Low-cost businesses can sell flour at a reduced price, while higher-cost businesses are bound to bear it.
Secondly, flour companies should not only consider the previous cost, but also consider the future cost, which will involve the expectation of wheat.
On the one hand, the expectation of a bumper new wheat harvest is getting higher, further suppressing the center of gravity of wheat prices, while on the other hand, in addition to the current rotation, the market is beginning to focus on the release of wheat in the market.
Although under normal circumstances, in the case of sufficient supply of wheat, especially in the case of strong supply and weak demand, the probability of wheat being put on the market is not high, but there is a special condition to consider, that is, the number of wheat stored in the market for more than 10 years is not low, and the quantity may be about 10 million tons.
This makes the market or the company's expectations for new wheat further weaken, so in this case, the company will try to keep the price of wheat as low as possible to reduce the risk.
Third, despite the decline in wheat, it is becoming less and less likely to be re-killed.
As a food product, the consumption of wheat is basically stable, and it is difficult to increase it too much. Therefore, the main increase in wheat consumption is in feed.
But feeding this year is also very difficult:
On the one hand, the aquaculture industry is sluggish.
Pig prices are grinding for too long, farmers lose money for too long, although this year's expected rise in sentiment is relatively high, but feed companies are also waiting for pig prices to rise, while also waiting, the enthusiasm for procurement is not high.
On the other hand, corn has fallen below 2300 yuan/ton, while wheat is about 2600 yuan/ton, and the price difference between corn is very obvious, it can be said that there is no advantage, and many feed companies have basically stopped purchasing wheat.
Although wheat has stabilized in recent days, the main reason is that on the one hand, the policy grain supply has eased, and the purchase has increased, which has eased the market sentiment to a certain extent.
On the other hand, it was also the market that was able to take a breather after the crash.
But I'm afraid it's just a breather, as the new wheat harvest is getting closer and closer, confidence is getting less and less, and wheat prices are still at risk of a small decline.
The scenery of previous years is no longer there, and the market of 1.6 yuan at every turn can't go back.
At the end of this article, thank you for reading!