At present, domestic wheat is in the market cycle, but due to the impact of the crazy auction of reserve wheat and the increasing expectation of new wheat harvest, wheat bearish sentiment is very strong.
As a result, wheat prices have fallen frequently, although only sporadic Hubei early-maturing wheat is currently on the market, but the quotations of many companies have fallen.
However, unlike the domestic wheat lamentation, the international wheat has come to the spirit and continues to soar, hitting a new high in 9 months.
As we all know, since the outbreak of the Russia-Ukraine conflict, international wheat has borne the brunt and rushed to a high level. However, as the market digested the news of the conflict and the Federal Reserve's crazy interest rate hikes, global food prices fell in response, and wheat naturally returned to normal levels.
But why is it so good, but it suddenly rises again?
One reason for this is still geopolitical influences.
Although the impact of the Russia-Ukraine conflict at the news level has been significantly weakened, the conflict has not ended and has been continuing.
As the breadbasket of Eastern Europe, Ukraine's wheat production cannot be ignored.
However, due to the impact of the war, many farmers had to abandon their crops. On the other hand, due to cost and price factors, some farmers have begun to abandon wheat in favor of more profitable crops such as rapeseed.
This has also led to a reduction in wheat production.
Another important factor is the weather.
The weather has been outstanding in the last two years.
For example, the world first experienced three consecutive years of La Niña, and then after the end of La Niña, El Niño finally came to an end in the middle of this year, but according to global weather forecasts, La Niña may not be connected again.
This is suffocating for the whole world, especially in agriculture, which depends on the weather for food, which will naturally affect the cultivation and growth of food, and then affect the production and export of food.
Taking several major wheat-producing countries as an example, Europe has had more rain this year, resulting in excessively wet soil, which is not conducive to wheat growth, and several major wheat-producing countries such as France have expected to reduce production.
The United States and Australia are suffering from drought, and wheat production is also expected to be stormy.
The bigger blow came from Russia, the world's number one wheat exporter, which had a bumper wheat harvest in the past two years.
This year, however, this is not the case, as dry weather has repeatedly lowered wheat production forecasts, and the latest forecast suggests that there may be a risk of frost in central Russia, the Volga region and some southern regions in May, which will undoubtedly further weigh on wheat harvest expectations.
Some analysts even predict that this will bring wheat stocks to their lowest level in nearly 10 years.
As a result, under the superposition of these factors, the international wheat market continues to be bullish, and Chicago wheat has hit a new high in nearly 9 months.
So, with the rise of the international wheat market, can this wave of rise be transmitted to the country, so as to improve the decline of domestic wheat?
From a conduction point of view, the impact is not significant.
Because although the international wheat price has risen, the mainland's wheat self-sufficiency rate is very high, and it is very little affected by the international market.
The rise in wheat prices in the first two years is not simply due to the direct transmission of international markets, but mainly the result of multiple factors such as cost, supply and demand.
At least for now, under the expectation of a bumper harvest, domestic wheat supply and demand are loose, and there is no basis for a sharp rise.
On the other hand, the domestic wheat production situation is uncertain.
Although wheat prices are falling endlessly, wheat is not fully marketed at present, and the market is more sentimentally bearish.
In terms of policy, there has been no further action since the two "stoppages", so it is a bit premature to characterize wheat at this time.
The wheat still needs time, so let's let the bullets fly a little longer.
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