Why has new wheat purchase and sales been so sluggish recently?

At present, wheat harvest south of the Huai River is basically over, and new wheat has generally begun to come onto the market in large quantities. Various grain purchasing entities have begun to enter the market to buy new wheat, but grain traders and brokers are not highly motivated to purchase, and purchasing is temporarily dominated by market-based buying. Wheat prices are rising slowly. Affected by weather, this year's wheat yield and quality are poor, market prices are lower than the same period last year, and the market grain sources suitable for the national policy purchase standard have decreased, causing the progress of the minimum purchase price policy purchase to be slow. Some new wheat has become feed grain on the market, and purchase prices follow the market. The sales channels for new wheat purchased by non-policy purchasing entities are not yet clear, so purchasing is relatively cautious. For this year's wheat of uneven quality, a business strategy of purchasing selectively on the basis of quality is mostly adopted.

According to market monitoring on June 13, new wheat purchase prices in the Anhui area tended to be stable, generally showing a weak trend. Among them, policy purchasing depots in the Wuwei area strictly implemented the national purchase policy and purchased new wheat at 118 yuan per 100 jin, while other purchasing entities purchased according to the market, with purchase prices varying. The moisture requirement for purchase was about 13%, and purchase prices were 70-105 yuan per 100 jin, with relatively large price differences. In the Wangjiang area of Anqing, wheat with a test weight of 760-770 and moisture of 14% was purchased at 104 yuan per 100 jin; in the Chuzhou market, the new wheat purchase price was 100 yuan per 100 jin; in Lixin, Bozhou, wheat with moisture of 15% and test weight of 760 was purchased at 95 yuan per 100 jin; in the Yingshang area of Fuyang, wheat with moisture of 14% and test weight of 750-770 was purchased at 105 yuan per 100 jin; in Xiao County, Suzhou, wheat with moisture of 15-16% and test weight of 770 was purchased at 108 yuan per 100 jin; in Huainan, new wheat with moisture of 14% and test weight of 760-770 was purchased at 105 yuan per jin, all unchanged from yesterday. Because the quality of new wheat is uneven, new wheat purchase prices in northern Jiangsu were running weakly. At present, flour mills purchase wheat with unsound kernels within 10% at a factory-gate price of 112 yuan per 100 jin, but the purchase volume is not large. Currently, wharf purchase prices in northern Jiangsu range from 105-108 yuan per 100 jin, with prices determined by quality; in the Xinyi market of Jiangsu, the average field-side purchase price of new wheat was 104 yuan per 100 jin, basically unchanged from the beginning of the month. Among them, the price of new wheat purchased by individual grain brokers going down to villages and households was 102 yuan per 100 jin, and the price of new wheat at large purchasing households with stores in market towns was 104 yuan per 100 jin. It is understood that since Anhui, Jiangsu and other provinces launched the minimum purchase price policy purchase plan, new wheat purchase prices in some areas have shown an upward trend, but the overall market purchase price is still far below the minimum purchase price level, and wheat prices are rising slowly.

In this year's new wheat harvest season, rainfall in the southern wheat areas was frequent, adversely affecting wheat that was at the harvest stage and causing serious damage to wheat quality in some areas. According to a survey by the Suzhou City Grain Industry Association in Anhui Province, new wheat in Yongqiao District of Suzhou has begun to come onto the market, with moisture of 16-18%, and wheat output reduced by about 10%. The unsound kernel rate of wheat seriously exceeded the standard, mainly sprouted wheat and scab-infected kernels. In Lingbi County, wheat output in 2016 was about 800 jin per mu. This year's wheat quality includes relatively many shriveled kernels, while sprouted wheat is not abundant. According to monitoring of test data for 27 samples provided by the city grain and oil quality inspection center, unsound kernels generally reached 12.0-15.0%, with the highest reaching 21.8%. Among the 27 samples tested, 19 samples had unsound kernels exceeding 10.0%, accounting for 70%. Several rounds of rain and strong winds since May caused more than 2 million mu of wheat in Jiangsu to lodge, and nearly 800,000 mu of wheat fields accumulated water. In some areas, individual fields even showed sprouting of wheat ears. At present, wheat in southern Jiangsu has already come onto the market. Reports indicate that this year's wheat grade has declined, with most wheat of fourth and fifth grade quality, and unsound kernels in some wheat exceeding 15%.

It is understood that at present policy purchasing depots strictly implement the national purchase policy, purchasing medium-quality new wheat at 118 yuan per 100 jin, while other purchasing entities carry out market purchases according to the market, with a moisture requirement of about 13% for purchase and higher prices for better quality. Because this year's wheat harvest period encountered continuous rainy weather, both the yield and quality of new wheat declined. Currently, wheat circulating on the market is mainly post-rain wheat, with a small amount of pre-rain wheat, which has relatively good moisture, mostly around 15%. After post-rain wheat is dried, the test weight is still fairly good, basically reaching more than 750 per liter. Affected by the decline in new wheat quality, purchasing by various entities has become cautious. Farmers' grain-selling prices have fallen sharply year on year, and planting returns have declined. On the one hand, the current market purchase price for poor post-rain wheat is 70-80 yuan per 100 jin, and purchasing enterprises are not highly motivated to buy. Farmers are torn about whether to sell or not. Compared with the same period last year, farmers' grain-selling prices have fallen by 30-35 yuan per 100 jin, planting returns have clearly declined, and a small number of large grain-growing households may incur losses. On the other hand, as the country intensifies efforts to reduce inventories of corn and overdue-stored japonica rice, wheat's role as a substitute for feed grain has weakened. Poor-quality wheat used as feed grain does not have a price advantage in the market. After market-based purchases by purchasing enterprises, sales channels have narrowed, making purchases cautious. A large amount of wheat that does not meet the national policy purchase standard remains in the circulation market, dragging down new wheat prices. Judging from the earlier purchasing situation in the southern wheat areas, grain traders and brokers generally do not have an optimistic view of this year's new wheat quality. Market-based purchasing entities are relatively cautious about entering the market to purchase, purchase and sales activity is low compared with previous years, flour production enterprises are also relatively "picky" in procurement, and speculative stockpiling of grain while waiting for higher prices has decreased.