SunSirs: China Domestic Wheat Prices fluctuated and moved forward in June

According to the Commodity Market Analysis System of SunSirs, the domestic wheat market prices fell first and then rose in June, with overall fluctuations moving forward. On June 1st, the average price was 2,772.00 RMB/ton, and on June 30th, the average price was 2,802.00 RMB/ton, an increase of 1.08% within the month.

In June, due to the significant rainfall in some production areas, a large number of low-quality malt wheat entered the market circulation link, and the overall price of aged wheat was under pressure. In the middle of the year, domestic wheat was fully introduced to the market, with a large amount of high-quality wheat arriving. After effectively replenishing the inventory of flour processing enterprises, they successively lowered the purchase price of wheat. At the same time, imported wheat continued to arrive in Hong Kong, and the overall new and old wheat market in China seamlessly connected. In addition, the demand for summer flour gradually decreased, and the supply pressure on the wheat market continued to increase. The overall price of domestic wheat market continued to be weak.

In late June, the domestic wheat harvest has gradually come to an end, and the quality differentiation of new wheat is more severe. The situation of high quality and good price in the wheat market is becoming increasingly evident. In addition, local grain depots continue to purchase new wheat at high prices, and the price of Linchi corn continues to rise. The mentality of grassroots grain storage and trade entities is becoming stronger, supporting the price rebound in the domestic wheat market.

The latest customs data shows that in May 2023, China imported 1.15 million tons of wheat, an increase of 71.5% compared to the same period in 2022. From January to May, China imported 7.19 million tons of wheat, an increase of 62.5% compared to the same period in 2022.

SunSirs wheat analysts believe that with the support of short-term grain trading entities' reluctance to sell and high prices, it is expected that there will still be some room for price recovery in the domestic wheat market. Overall, a large amount of imported wheat will continue to arrive in Hong Kong, and downstream flour demand will be even more sluggish after the school holiday in July. The overall supply of wheat in the market will not decrease, and there is limited room for overall price increase in the domestic wheat market in July.

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