The consumption rate of grain source in market circulation determines the total amount of trade space purchase in wheat market.

At present, the acquisition of "unlimited low price" in the new wheat market in the main producing areas makes the "buyer" market atmosphere is strong, the effective supply is relatively abundant, and the high national temporary storage price restricts its effective supply. With the gradual decline of the number of new wheat sources in the circulation market, the reduction of supply will affect its market price, and the speed of demand digestion of new wheat will directly affect its phased market opportunities.

The total amount of acquisitions is still at a high level in recent years.

According to statistics, as of August 15, various types of grain enterprises in nine major producing areas, including Henan and Jiangsu, had purchased 55.29 million tons of new wheat, accounting for 44.73 percent of the output. As of August 15, the number of purchases in the major wheat producing areas in China was 17.87 million tons, a decrease of 7.42 million tons, or 29.34 percent, over the same period last year.

Last year, due to the rise in wheat prices, the purchase time of supporting the market was relatively short. This year, due to the continuous fluctuation of wheat prices around the supporting price, the cycle of supporting the purchasing of the market has obviously lengthened, and the number of acquisitions supporting the market has gradually approached that of the previous year.

Judging from the progress of the purchase of wheat in the main producing areas in recent years, the market volume increased by 3.038 million tons from July 5 to 15, 1.847 million tons from 16 to 25 July, 1.558 million tons from July 26 to August 5, and 817000 tons from August 6 to 15.

New purchases showed a significant slowdown, which brought significant restraint to the start of the rising wheat market. Although the progress of acquisition of Xinmai in the main producing area is slow compared with the same period last year, the progress of acquisition since 2006 is second only to the previous year.

Stable and weak to compress trade space

Since the listing of new wheat in independent producing areas, the phased market opportunity has disappeared, and the overall market situation of new wheat has continued to be weak. Grain enterprises have basically adopted production ordering, and the amount of inventory is lower than in previous years. Grain depots, grain traders in addition to support the market acquisition quality control, market trade to take sales orders to control risks.

Last year, due to the phased rapid growth of supporting the market, coupled with the large-scale use of forage wheat since late July, the supply of grain in the circulation market was tight, the psychology of purchase and sale was reversed, the sales of grain holders were weakened, and the purchasing efforts of grain users were intensified, and the price of wheat ushered in a phased market. With the disappearance of the above factors this year, the opportunity for a phased rise in wheat prices will be significantly postponed. By the end of August, the entry price of medium common white wheat in Xinyi area of Jiangsu Province was 2360 yuan / ton, unchanged from the previous month, down 60 yuan / ton compared with the same period last year; the entry price of medium common white wheat in Bengbu area of Anhui Province was 2360 yuan / ton, unchanged from the previous month, down 60 yuan / ton compared with the same period last year; the entry price of medium common white wheat in Jinan, Shandong Province was 2400 yuan / ton, down 40 yuan / ton from the previous month and 200 yuan / ton from the same period last year. The entry price of medium common white wheat in Shijiazhuang area of Hebei Province was 2420 yuan / ton, down 20 yuan / ton from the previous month and 200 yuan / ton compared with the same period last year. The entry price of medium common white wheat in Zhengzhou area of Henan Province was 2420 yuan / ton, down 20 yuan / ton from the previous month and 120 yuan / ton from the same period last year.

The effective supply of national temporary reserves has declined.

As the market price of new wheat continues to be lower than the national reserve wheat auction floor price, the transaction volume of national temporary storage wheat continues to shrink. Although the surplus stock of wheat in temporary storage is 15.5 million-16.5 million tons higher than that in the same period last year, due to price constraints, the purchase price of new wheat in last year is generally higher than the auction price of wheat in temporary storage, and its effective supply is obviously lower than that in the same period last year.

Statistics show that since the beginning of June 2015, the weekly grain supply in the national wheat auction market has remained at the level of 1.2 million tons. By the end of August, a total of 13 wheat auctions had been held in the national temporary storage wheat auction market, with a total of 15.216981 million tons of grain sources, with an actual transaction volume of 294075 tons, with an average transaction rate of 1.93 percent, with an average weekly transaction price of 2469-2500 yuan per ton. By contrast, in the same period last year, the weekly grain supply in the national temporary wheat auction market remained at the level of 500000 tons, with a total of 6.615149 million tons, with an actual transaction volume of 1.387627 million tons, with an average transaction rate of 20.98%, and the average weekly transaction price was 2293-2367 yuan per ton. The opportunity for the periodic rise of the wheat market is slow.

Statistics from relevant agencies show that domestic wheat flour production was 12.139435 million tons in July 2015, compared with 12.535194 million tons in June.

At present, it is only one month before the end of the wheat market purchase in the main producing areas, under the situation that the market price is lower than the market price, in the later stage, with the end of the acquisition implementation period, the supply and demand pattern of grain sources in the market circulation will become the key to affect the trend of wheat price.

With the passage of time, the continuous decline in the number of grain sources in the circulation market and the warming of procurement demand will make large-scale procurement more and more difficult.

As the new wheat has a price advantage over the national temporary storage wheat, under the condition that the national temporary storage wheat auction base price is not significantly reduced, this means that it will be difficult for the national temporary storage wheat and newly purchased wheat to flow to the market for a period of time in 2014, which will accelerate the consumption of grain sources in the circulation market.

Once it is difficult to purchase new wheat as the main body of grain, in order to maintain the processing and supply of grain sources, the supply channels of grain sources will gradually turn to the temporary storage wheat auction market, and the market price may be in line with the purchasing cost of temporary storage wheat. The recovery of national temporary storage wheat may become a weather vane for the scarcity of the circulation market.