One of the main reasons for the decline of wheat price is that the consumption is weak, after the year, the delivery of flour is less than expected, the downstream goods are slow, and the market of flour and bran is greatly reduced, which limits the enthusiasm of flour milling enterprises to replenish raw grain, so this situation also causes the main factor of the decline of wheat price.
Secondly, the auction of wheat in the market is constant, with the scale of (10+4) million tons per week, and the local grain depot has also increased the pace of rotation, and the market has sufficient supply of raw materials, and there are still some surplus grain at the grassroots level.
Third, the wheat yield increased last year, which had a great impact on the price. Traders and grain depots had sufficient storage scale. Due to the mask problem, the demand for flour has been sluggish for a long time. Recently, the financial pressure of some grain holders has increased sharply, and the phenomenon of recognizing losses and leaving goods has increased.
Fourth, the profitability of milling enterprises is worrying, large factories fail, small and medium-sized flour mills follow suit, and market panic spreads.
Fifth, the scale of imported wheat is increasing, and the spot market is further under pressure! Therefore, this situation is also one of the main factors causing the decline in wheat prices.
The impact of falling wheat prices on the market First, the current market is not very friendly for traders who are storing grain to rise. For example, in June, 2022, a trader collected and stored wheat at the price of 3060 yuan per ton, plus the cost of capital, storage and loss. By March this year, the comprehensive cost of wheat in storage was not less than 3240 yuan per ton, but to send it to nearby processing enterprises, the freight and pound loss would have to be added at least by 30 yuan. That is to say, if the enterprise buys according to the listing price of 2920 yuan per ton, the grain delivery traders will lose a ton of money in 350 yuan.
Second, although processing enterprises can reduce production costs by lowering the purchase price of wheat, they still face some problems. Taking an ordinary medium-sized flour milling enterprise in North China as an example, according to the current market price of 30 flour at 3400 yuan per ton, bran 1960 yuan and other types of flour produced, this flour milling enterprise will lose about 110 yuan when processing1ton flour. For some leading enterprises and special flour enterprises, there are also different degrees of losses in the current market environment.
Third, for the state-owned reserve system, because the reserve rotation is self-financing, the declining spot market also makes the rotation more difficult. On the one hand, poor downstream consumption leads to the decline of wheat, which will slow down the rotation efficiency of reserve wheat. In order to complete the rotation task on schedule, it is necessary to lower the rotation price with the market, which will lead to further negative feedback in the market. On the other hand, in order to ensure the quantity, grade and price of wheat rotation in the later period, some state-owned reserve systems will sign two-way purchase and sale agreements with local enterprises. The two sides will agree on the price difference between the current rotation and the later rotation, and the enterprises will provide new wheat to the state treasury as rotation after the new wheat is listed. However, under the background that the current price of old wheat is lower than that of new wheat last year, if farmers are reluctant to sell new grain after it is listed this year, the relevant state-owned reserves and enterprises undertaking the task of rotation will face certain performance risks.
In the long run, there is little room for price recovery, and the market supply level. According to the wheat output, commodity volume and acquisition last year, the estimated milling consumption and feed consumption are deducted, and it is roughly estimated that the surplus grain available for sale in the current society is about 22 million tons to 25 million tons, which does not include the marketable wheat and the ongoing rotation wheat. Wheat imports will also have an impact on the market. According to customs data, 1 month to February * * * imported 3.02 million tons of wheat, up 38% year-on-year. Before this year's harvest, the wheat in the main producing areas in China remained abundant.
Second, on the consumption level, from the current to the listing of new wheat, the consumption of wheat may show a trend of shrinking stock and lack of increment, which is reflected in the market, that is, the operating rate of milling enterprises remains at a low level. The feed consumption of wheat may gradually improve, which is mainly due to the gradual narrowing of the price difference between wheat and corn. For large-scale farming enterprises, the required corn price is relatively firm. It is estimated that before the new wheat goes on the market, the feed corn with better quality in North China will not be less than 2,760 yuan per ton. If the wheat price falls below 2,860 yuan per ton in the later period, the price difference between the two will not be higher than 100 yuan, or the replacement window of wheat will be opened. In addition, whether the price of soybean meal continues to fall will also affect the substitution process of wheat.
Tips: It is suggested that farmers who still have grain in their hands should do their best to save grain. In the later period, with the rapid rise of temperature and the increase of rain, it is more difficult to keep grain, and the risk of moisture deterioration increases, so it is of little significance to continue to keep it; Grass-roots grain shops and small and medium-sized traders can make use of the advantages of flexible purchase and sale and take root in the front line, and carry out short-term and fast-track trade by locking in the first home and then finding the next home; Enterprises that bought wheat through third-party funds last year, if the stock is still large, suggest to distribute grain reasonably and orderly. After all, it is only less than two months before the listing of new wheat. At the same time, they can also consider visiting the provinces in the sales area and using the price difference between regions to reduce losses. The focus of processing enterprises should shift to the downstream sales of finished products such as flour and bran and the expansion of trade channels, while strengthening inventory management and maintaining the health and safety of cash flow.