Traders eager to sell inventory wheat prices continue to bottom out

Due to the sluggish demand for rations, the disappearance of feed demand, the massive sell-off of wheat in temporary storage, and the rotation of wheat out of storage and other factors, the current price of domestic wheat has been falling since October. Traders are eager to sell wheat stocks, and there is a competition to cut prices in some areas.

Traders are eager to sell wheat stocks and prices continue to bottom.

"you have a lot of information as journalists and you have a wide range of friends. Help me ask who buys wheat." Recently, the Futures Daily reporter has been receiving phone calls from friends engaged in wheat trade. The common topic is how to sell the wheat in stock.

Affected by the sluggish demand for food rations, the disappearance of feed demand, the massive sell-off of wheat in temporary storage, and the rotation of wheat out of the warehouse, the current price of domestic wheat has continued to decline since October, of which the contract price of Zhengzhou Qiangmai 1501 has fallen by about 200 yuan / ton, and has fallen below the spot market price of Pumai, and yesterday hit a new low of 2536 yuan / ton in nearly a year.

According to the analysis of Li Tianyi, a wheat trader in Xinyang City, Henan Province, the reason for the sharp drop in wheat prices is that apart from the fact that people eat more rice and gradually reduce the demand for wheat rations, at present, the prices of most feed raw materials, such as corn, early indica rice, soybean meal, rapeseed meal and cottonseed meal, have continued to decline, which makes the feed demand for wheat basically disappear, while in previous years, the domestic feed demand for wheat was 20 million-25 million tons. This is one of the main forces driving up wheat prices, and now that this force has disappeared, wheat prices are expected to continue to bottom out.

"most of the wheat produced in Xinyang and the south of Zhumadian is used for feed processing and is mainly sold to Guangzhou, Guangxi and Sichuan. Towards the end of the year, it is supposed to be a time for buyers to gather, but this year, many wheat operators are left out in front of their doors. there are very few customers who purchase forage wheat, and many small business households cannot support it, and they have begun to deal with wheat stocks at low prices." Li Tianyi said.

According to the reporter's understanding, the ex-factory price of rapeseed meal from small oil press plants in Hunan and Hubei is only 1600 yuan / ton, compared with about 2100 yuan / ton at this time in previous years. At the same time, soybean meal, cottonseed meal and corn prices are also at historic lows, more and more feed companies have adjusted the raw material formula, wheat has largely withdrawn from the feed sector, which is a drag on wheat demand.

"Jiangsu Province has increased the sale of stored wheat since October, and there is an ample supply in the current market, so grain enterprises do not have to go to Henan, Hebei and other places to purchase wheat as in previous years." Wang Jin, a wheat dealer in Yixing, Jiangsu Province, said that except for some high-quality wheat varieties with a slightly tight supply and high market transaction prices, the prices of all kinds of common wheat are now relatively low. In spite of this, life is still difficult for many flour mills, mainly because the sales volume and price of flour are as depressed as wheat, and the domestic wheat rations consumer market is constantly squeezed by rice, which limits the room for wheat demand growth.

At present, light and temperature in domestic winter wheat producing areas are more suitable for wheat growth, coupled with good soil moisture, which is conducive to winter wheat tillering and rooting growth, the market is expected to increase wheat yield next year. In addition, the sown area of wheat in many producing areas has increased, coupled with the fact that the government has made it clear that it will not raise the minimum purchase price for wheat next year, which makes the market more bearish about the future of wheat, and many traders are now eager to sell wheat in stock. there is competition for price reduction in some regional markets.

Wheat trader Kong Ming told reporters that he recently received 500 tons of wheat from the strong wheat market in Zhengzhou, and had planned to hoard it for a period of time, and made use of the seasonal rising law of the wheat market to earn a seasonal price difference. Unexpectedly, wheat prices fell again and again. Coupled with a discount of 3.7 tons of water for 500 tons of wheat, a business lost tens of thousands of yuan.

"there is no hope for strong wheat in Zhengzhou to rise in the short term. Pumai estimates that there is still room for downside. We do not intend to do wheat trade this year and enter the market again when the market situation is clear next year." Kong Ming plans to retire from the wheat market for a while.