Farmers May See a Wave of Concentrated Grain Sales, Purchase Volume Expected to Grow

As this year's wheat harvest is already assured and supply is abundant, although some major producing provinces have introduced relevant subsidy policies to promote wheat purchases, such as Henan Province recently allocating 15 million yuan in fixed subsidies to cities and counties with excessive imperfect grains, grain sources in farmers' hands and circulating in the market remain abundant.

Purchase Progress Slows, Supply to Be Loose Later

The progress of new wheat purchases is significantly slower than the same period last year. Statistics from the State Administration of Grain show that as of August 15, nine major producing areas including Henan and Jiangsu had purchased 55.29 million tons of new wheat, a decrease of 11.21 million tons from the same period last year. On the other hand, the added purchase volume over the 5th gradually declined, indicating that the purchase progress is gradually slowing. From August 10 to 15, the added purchase volume was 1.57 million tons, compared with 2.348 million tons from August 5 to 10, and 2.495 million tons from August 1 to 5.

Wheat Prices Stable to Slightly Weak, Flour Prices Steady

Monitoring shows that wheat prices were stable to slightly lower this week, and it is expected that in the short term wheat prices lack upward momentum and will continue to run in a slightly weak trend.

Old wheat prices in various regions were basically stable. On August 19, the wheat purchase price of flour milling enterprises in Shijiazhuang, Hebei, was 2,500 yuan/ton; in Jinan, Shandong, 2,480 yuan/ton; in Xuzhou, Jiangsu, 2,460 yuan/ton; in Suzhou, Anhui, 2,420 yuan/ton; and in Zhengzhou, Henan, 2,510 yuan/ton, all unchanged from last week.

New wheat prices in some regions saw slight declines. The factory-gate price of new wheat meeting the national standard Grade 3 in Zhengzhou, Henan, was 2,260 yuan/ton, down 20 yuan/ton from last week; in Jinan, Shandong, 2,380 yuan/ton, down 20 yuan/ton; and in Shijiazhuang, Hebei, 2,380 yuan/ton, down 20 yuan/ton.

The flour market was overall stable this week. As flour is still in the off-season for production and consumption, market demand is sluggish, processing enterprises are not very active in purchasing and mostly buy according to need, and flour mills are not shipping quickly, which suppresses the flour market. On August 19, the factory-gate price of special first-grade flour in Shijiazhuang, Hebei, was 3,080 yuan/ton; in Jinan, Shandong, 3,100 yuan/ton; in Zhengzhou, Henan, 3,140 yuan/ton; in Xuzhou, Jiangsu, 3,140 yuan/ton; and in Suzhou, Anhui, around 3,040 yuan/ton.

Bran Prices Expected to Remain Weak

Monitoring data show that bran prices remained weak this week, with declines in some regions. On August 19, the factory-gate price of bran in Shijiazhuang, Hebei, was 1,060 yuan/ton, down 100 yuan/ton from last week; in Jinan, Shandong, 1,120 yuan/ton, down 20 yuan/ton; in Zhengzhou, Henan, 1,140 yuan/ton, and in Xuzhou, Jiangsu, 1,200 yuan/ton, both unchanged; and in Suzhou, Anhui, 1,160 yuan/ton, down 180 yuan/ton.

As the weather turns cooler, schools reopen and the Mid-Autumn Festival approaches, demand for flour will increase, which will drive an increase in bran supply; however, downstream breeding enterprises have ordinary demand for bran as feed, and bran is greatly affected by temperature and difficult to store, so purchasing enthusiasm is not high. The situation in which bran supply exceeds demand may continue for some time. The trend of bran prices depends on the relationship between supply and demand; therefore, it is expected that in the short term bran prices will lack upward momentum and will remain stable to weak.

Henan Wheat Auction Sees No Sales, Anhui Transactions Increase Slightly

Monitoring data show that on August 18, the Anhui and Henan markets together auctioned 1.1508 million tons of state reserve wheat, with 6,600 tons sold, a decrease of 1,500 tons from last week; the transaction rate was 0.57%, down 0.13 percentage points from last week.

At present, it is the off-season for flour production, inventory wheat is being consumed slowly, and traders and farmers are relatively active in selling, which suppresses wheat prices, and the overall market is in a fairly wait-and-see mood. It is expected that policy wheat transactions will remain at a relatively low level later on.

In the Henan market, all of the auctioned minimum purchase price wheat failed to sell, marking the first zero transaction since wheat auctions began; in the Anhui market, both the transaction volume and transaction rate of auctioned state temporary reserve wheat were higher than last week, rising for the third consecutive week.