The surge in bran prices may stop in December 2016

Monitoring shows that the current ex-factory price of bran from flour milling enterprises in Jinan, Shandong is around 1500 yuan/ton, around 1560 yuan/ton in Zhengzhou, Henan, around 1520 yuan/ton in Shijiazhuang, Hebei, around 1560 yuan/ton in Xuzhou, Jiangsu, and around 1560 yuan/ton in Suzhou, Anhui, all up 60-80 yuan/ton from last week. Continued release of market-support purchases keeps wheat prices running steadily. This week, the state's temporary reserve wheat auction sales released a total of 2.6093 million tons, with 206,200 tons sold, an increase of 16,500 tons from last week; the transaction rate was 7.9%, up 0.72 percentage points from last week; the average transaction price was 2506 yuan/ton, higher than last week's 2500 yuan/ton. Among these, the 2015 white wheat released in Hebei sold 32,300 tons, with a transaction rate of 63.47%, down 16 percentage points from last week, at an average price of 2536 yuan/ton; the 2015 white wheat released in Shandong sold 14,900 tons, with a transaction rate of 14.52%, down 6.38 percentage points from last week, at an average price of 2508 yuan/ton. In November, the 2015 market-support wheat was released to the market, and wheat market prices had already aligned with the ex-factory price of policy grain sources; the auction transaction rate increased significantly compared with previous months, increasing market grain supply and weakening bullish expectations for wheat market prices.

There is still some time before New Year's Day and the Spring Festival, and flour milling enterprises have not yet begun large-scale stockpiling. Wheat demand is stable. Under the combined effect of these two factors, wheat market prices maintained steady operation in November. Monitoring shows that at present, the ex-factory price for new wheat with moisture within 12.5% and test weight above 770 g/liter from flour milling enterprises in Shijiazhuang, Hebei is around 2600 yuan/ton, around 2580 yuan/ton in Heze, Shandong, and around 2560 yuan/ton in Xinxiang, Henan; the ex-factory price for new wheat with moisture within 13.5% and test weight above 770 g/liter in Suzhou, Anhui is around 2520 yuan/ton, and around 2520 yuan/ton in Xuzhou, Jiangsu. The trend has basically remained stable, with slight increases in some areas compared with last week. It is expected that by December, wheat demand will gradually enter the peak season, wheat demand will continue to increase, and the transaction rate of market-support wheat auctions will continue to rise. However, because wheat market prices have already aligned with the ex-factory price of market-support wheat, the price "ceiling" effect is obvious, and the possibility of wheat prices continuing to rise is not great; they will maintain steady operation.

The price spread between high-quality and ordinary wheat is relatively small, and strong wheat prices can be expected to rise. Monitoring shows that the current ex-factory price of "Gaoyou 2018" in Shijiazhuang, Hebei is around 2720 yuan/ton, around 2660 yuan/ton in Heze, Shandong, and around 2660 yuan/ton in Xinxiang, Henan; the ex-factory price of "Zhengmai 366" in Heze, Shandong is around 2660 yuan/ton, and around 2660 yuan/ton in Zhengzhou, Henan; the ex-factory price of "Jinan 17" in Heze, Shandong is 2680 yuan/ton, and around 2640 yuan/ton in Nanjing, Jiangsu, with some areas up 40-60 yuan/ton from the beginning of the month. Because ordinary wheat prices have stabilized at a high level, significantly higher than the same period last year, the current average wheat price in the North China and Huang-Huai region is around 2562 yuan/ton, 190 yuan/ton higher than the same period last year. Although high-quality wheat prices have risen recently, the price spread between high-quality and ordinary wheat is still at a historical low. At present, the average price spread between high-quality and ordinary wheat in producing areas is around 100 yuan/ton, a decrease of around 180 yuan/ton from the same period last year. At present, the release intensity of market-support wheat has increased, ordinary wheat prices have basically peaked, and room for increase is limited, while high-quality wheat prices may have much potential. First, the flour milling consumption peak season is approaching, demand for specialty flour will increase, and demand for strong-gluten wheat will increase accordingly, which will have a certain upward pulling effect on strong-gluten wheat prices; flour mills are operating below capacity, and bran supply is limited. Current wheat prices have stabilized at a high level, flour prices have still maintained steady operation, and the "strong wheat, weak flour" pattern continues. Monitoring shows that the current ex-factory price of special first-grade flour from flour milling enterprises in Shijiazhuang, Hebei is around 3160 yuan/ton, around 3180 yuan/ton in Jinan, Shandong, around 3120 yuan/ton in Zhengzhou, Henan, around 3100 yuan/ton in Xuzhou, Jiangsu, and around 3120 yuan/ton in Suzhou, Anhui, all basically flat with last week. Because wheat prices have stabilized at a high level, and raw grain procurement is still relatively difficult, the operating rate of flour milling enterprises remains low. Large and medium-sized enterprises have relatively stable operating hours, while small enterprises have significantly reduced operating hours, or even shut down. Monitoring by the China National Grain and Oils Information Center shows that the current average operating rate of flour milling enterprises is 47%, at a relatively low level. Flour enterprises are operating below capacity, bran market supply has decreased, and at the same time the weather has turned cooler, extending bran storage time. To increase profits, flour milling enterprises have a relatively strong willingness to support prices, strongly supporting bran prices. In addition, corn (1575, 31.00, 2.01%) prices in North China remain firm, which has also boosted bran prices.