Wheat prices are expected to rise in the 3rd to 4th quarters, but the increase will not be large. It is recommended to sell in late September to early October. The reasons are as follows.

Analysis of why wheat prices will not rise much after August.

From the beginning of this year to now, wheat prices have risen from 1.1 yuan to around 1.2 yuan, which has been caused by multiple reasons. The sustained upward trend will not be obvious, and the probability of a large increase is not high. It is unrealistic for another major increase like the one in June to occur again after August.

The reasons for this year's wheat price increase are, first, the late spring cold at the beginning of the year and the rain during harvest, which caused overall wheat output to decline slightly. Among this, Henan wheat was more severely affected due to continuous rainy weather during the harvest season, but the decline in national wheat output was not large, remaining at around 120 million tons, and market demand is basically stable.

Second, the psychology of "prices must rise after every disaster" affected the market. In June, during the early stage of wheat harvesting, there was a phased grain-grabbing phenomenon, and prices rose relatively sharply, but after June wheat prices already began to move toward rationality. At present, there has even been a small decline.

Affected by the reform of the national reserve purchase system, in 2014 the state, in order to ease the inventory pressure of wheat, corn, and rice, especially the corn inventory pressure, saw the corn stock-to-use ratio reach 141% in 2016. In 2015, the temporary reserve purchase price for corn was lowered, in 2016 the minimum purchase price for rice was lowered, and at the end of 2017 the wheat purchase price was lowered for the first time.

Therefore, under changes in the national reserve purchase policy and as domestic wheat prices gradually align with the international market, a sharp rise in wheat prices after August is not very realistic. In addition, because wheat market supply will continue to remain sufficient, expectations for wheat price increases should not be too high.

Analysis of the reasons for the steady rise in wheat prices.

First, major wheat-producing regions around the world suffered disasters of varying degrees, leading to a decline in global wheat output. Although the national minimum wheat price was set at 115 yuan/100 jin, down 3 yuan from the previous year, the overall wheat supply has declined somewhat, and the trend of steady wheat price increases is expected to be favorable.

Second, market demand will increase. As temperatures drop, wheat purchasing and sales will gradually pick up. As universities start, the Mid-Autumn Festival and National Day arrive, end-consumption will increase somewhat, flour market demand will effectively increase, and wheat market demand will also increase somewhat.

Analysis of the reasons for selling in late September to early October.

We just mentioned that in September the flour market's demand for wheat will increase somewhat, and at that time wheat prices will rise slightly. However, the peak price of this year's new wheat has already reached the expected level, market supply and demand are basically balanced, and out of consideration for "destocking."

The national wheat inventory is expected to be auctioned in October, and this move will have a counterproductive effect on the rise in wheat prices. Therefore, it is recommended to sell in late September to early October when wheat prices rise slightly.

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