You are surely aware of how wheat prices kept climbing through June. Now, in mid-July, although the price increase is not as large as last month's, the market is running steadily. And given this year's wheat market situation, Science Xingnong believes that wheat prices in the second half of this year will not trend downward, and that there may even be a small round of gains in October.

Current state of the wheat market

In June, wheat prices rose steadily from the start of the harvest through the end of the wheat harvest, and the increase was large. By the end of June, the pace of the price increase began to slow gradually, and wheat prices also began to stabilize. Nevertheless, in most regions the price of Grade 3 wheat and above has remained at more than 1.15 yuan per jin.

The recent stabilization of wheat prices is only to be expected.

Everyone is well aware of the reasons for this year's wheat price rise: this year's weather conditions affected not only the yield of wheat in most wheat-producing areas, but also its quality to a great extent. As a result, the market not only shows a shortage of new wheat, but an even tighter supply of high-quality new wheat, and this is the main reason wheat prices climbed all the way up this year.

In addition, because farmers generally were reluctant to sell after the wheat harvest, new wheat on the market was relatively tight, and prices naturally rose as well.

However, the recent trend in wheat prices has gradually slowed, and judging by the market prices over the past two weeks, the situation is not very good. Still, personally I think this is only temporary; over the longer term, the possibility that wheat prices will continue to rise is still very high.

Part of the reason wheat prices have held steady during this period is a decline in grain buyers' speculation. This year's grain production reduction is an indisputable fact, and some grain buyers, seeing this, began buying grain at high prices from the start of the wheat harvest, causing grain prices to rise rapidly. But this wave of grain-buying has gradually cooled since late June. Some grain traders have finished stockpiling, their enthusiasm for stockpiling has declined, and their awareness of risk has increased. This is also a major reason wheat prices have gradually moved steadily during this period.

In addition, the state grain reserves hold ample wheat stocks. On June 18, the state grain reserve announced a suspension of auctions, which was also a major factor in the rise in wheat prices. Although auctions are currently suspended, it can be expected that once they resume they will still deal a considerable blow to wheat prices.

At present we also happen to be in a period of sustained high temperatures, flour mills' sales are relatively sluggish, and demand for wheat is not strong enough, which is another factor affecting recent wheat prices.

Although wheat has been running fairly steadily recently, there will still be another round of price gains later on. The momentum for wheat to rise is still quite ample. So if you still have wheat stored at home during this period, Science Xingnong suggests it is best to keep stockpiling and wait a while longer before selling.

After all, around October the weather gradually turns cooler, flour mills' demand increases, and this year's wheat shortfall really does exist. So the current price is definitely not the end point; further gains can be expected, and although the increase will not be very large, it will certainly be better than the current price.

The above comes from Science Xingnong.