Recently, there has been a sudden change in wheat prices, which has caught people off guard. This downward trend puts pressure on traders because they don't have a timely grain to maximize profits. In addition to this, the sharp rise in wheat prices has also triggered pessimism in the market. However, the dilemma we face is that in this downtrend, we can only save ourselves. We can choose to sell quickly and stop losses in the downtrend, or we can firmly believe that the price of wheat will be ** again, reformulate the buy and sell strategy, and win in the retrograde market with a safe strategy, while taking the risk of a deep decline.
In the face of such a market environment, we must strive to make the best choice. Whether it is up or down, we need to have a clear understanding of the characteristics of the price and the reasons for the price drop in order to speculate on the trend of the price and improve our buying and selling strategies. Falling prices usually go through several phases, including the bottom space phase, the trend phase, the high run phase, and the trend phase. At present, wheat prices are in the trend stage and have gone through three main stages.
Initial decline period: This is the stage of high wheat prices, the momentum of price increases is gradually weakening, and the sales attitude of ** merchants is differentiated. Some traders choose to sell at a high level to lock in profits, while others are still enthusiastic and looking forward to the market to cover the price drop again. At this stage, the recovery of wheat prices does not promote customers' willingness to sell, and only after the price increase will the main body of grain be stimulated to speed up the speed of grain sales. Some smart ** chambers of commerce choose to exit the market at this stage and sell grain in order to obtain the highest profits. However, some ** merchants were confused by the sentiment of price increases and missed the opportunity to realize.
*Rebound period: In the case of wheat prices gradually**, **the main body has resisted ** and tried to push up wheat prices. At this time, the amount of grain purchased by deep processing enterprises has shrunk sharply, and they can only be forced to increase the purchase of grain to stimulate the main body of grain to speed up the pace of grain sales. However, during this period, the first merchants generally chose to flee the market and sell grain in order to obtain higher profits. This sell-off has limited the room for wheat prices to recover, which in turn has caused deep processing companies to depress acquisitions again. This cyclical pattern of ups and downs has formed a clear downward trend.
Main Decline Period: At this stage, the recovery momentum of wheat prices weakened, the decline increased, **appeared**, and continued to deep**. The market is full of pessimism, and the confidence of ** merchants has been hit, and they even choose to sell grain in the downtrend. Deep processing enterprises have grasped the leading power, taking the opportunity to lower the purchase and accelerate the price of wheat to limit the increase in the new cycle.
The game of purchase and sale seems to have no blades and no specific strategies and tactics, but in fact, the impact of falling prices is huge. Some merchants lost the opportunity because of the price of wheat, some chose to cut the wheat to stop the loss and leave, and some fell into the dilemma of falling at the bottom. The reason for all this is that we do not have insight into the reasons for the price drop and do not perceive the change in the trend in time. It is crucial to understand the reasons for the price drop so that we can change our buying and selling strategies.
1.The consumer demand for flour is limited, and milling enterprises forcibly reduce prices. At present, the domestic flour consumption market does not have the peak season demand we expect, and the consumption support is limited. Flour milling enterprises are not selling well, and they are not very willing to increase the purchase of grain, and they are not very interested in hoarding grain. In this macro context, wheat prices are rapidly rising and falling into the quagmire of falling prices. This sparked panic among the merchants, leading them to sell grain more aggressively.
2.Important consumption nodes have been postponed, and dealers have a strong wait-and-see attitude. Domestic flour consumption is characterized by seasonal growth, and flour consumption during the Spring Festival usually supports wheat prices. However, compared with last year, this year's Spring Festival is slightly late, resulting in the postponement of the consumption node before the Spring Festival, and dealers have a strong wait-and-see attitude towards flour demand. This also directly affects the willingness of the top traders to sell, causing them to choose to increase selling in the process of falling prices.
1.Keep abreast of market information: We need to keep abreast of market dynamics, grasp the changes in flour consumption demand, and the wait-and-see attitude of distributors and milling enterprises. You can get the latest market information by keeping in touch with professional teams and institutions in the industry, participating in industry exhibitions and seminars, etc.
2.Develop a flexible purchase and sales plan: In the case of frequent market changes, we need to develop a flexible purchase and sales plan and adjust the strategy at any time. We can cope with market fluctuations through reasonable risk diversification, such as purchasing grain in fixed amounts on a regular basis and increasing diversified sales channels.
3.Increase negotiation and bargaining power: In the process of purchase and sale, we should improve our negotiation ability and bargaining power, and conduct effective communication and negotiation with leading merchants and milling enterprises to strive for more favorable purchase and sales conditions.
4.Introduce ** and option tools: You can consider using financial tools such as ** and options to hedge ** risks and reduce purchase and sale risks.
In short, in the face of sudden changes in wheat prices, we need to understand the reasons for the price decline in time and formulate corresponding purchase and sales strategies. At the same time, we will flexibly adjust the plan, improve the negotiation and bargaining power, and introduce financial instruments and other measures to cope with market fluctuations and reduce purchase and sale risks.