Wheat**Why suddenly**?Will there still be **?Actually
Reasons for the sharp decline in wheat production.
This year's wheat market has seen a series of fluctuations, starting with three ** in the first half of the year, which caused panic in the market. Subsequently, the wheat harvest began, and the opening price hit a new low in nearly two years. However, just as the market was struggling, a light rain reversed wheat's decline, bringing it back to the $3,000 per tonne mark quickly. Although since then, wheat** has been at 1Hovering around $5, it is relatively stable, but has recently started to trend downward again. This begs the question, why is wheat suddenly **?
One reason for this is sluggish demand. The market generally believes that the sluggish demand is the reason for the blockage of the wheat ** trend. However, a closer analysis of the wheat market reveals that sluggish demand is not a recent phenomenon, but a phenomenon that has been present for a long time and has only been ignored by the market. There are two reasons why the market ignores the decline in demand. First of all, after the emergence of wheat quality differentiation, the market is full of optimism about the increase in wheat production, and flour companies and merchants are actively hoarding inventory, which leads to the actual demand being ignored. Second, the market expects an increase in wheat consumption in the future, especially towards the end of the year, which further masks the fact that demand is sluggish. However, it was not until the end of November that this lack of demand came to light, as flour consumption continued to weaken.
Second, the range of wheat ** is limited. Since the wheat harvest, although it has experienced continuous **, it has encountered resistance at a certain node every time and has not been able to break through 1The high level of 6 yuan catty had to end in failure in the end. Why can't wheat go up?Actually, there were early signs. On the one hand, the quality of wheat is different this year, and a large amount of malt wheat has appeared. Maltowheat dominates the feed market, excluding the feed wheat segment. On the other hand, the amount of imported wheat this year has reached a new high, after the conflict between Russia and Ukraine, the international wheat ** fast**, with Russia increasing grain exports, wheat exports ** also continued to decline, which further reduced the psychological bottom line of the international wheat **. In the case of excellent advantages in imported wheat, China has accelerated the pace of wheat imports;In October this year, wheat imports exceeded 10 million tons, with an annual increase of 377%。Although imported wheat is mainly used for variety adjustment rather than feed, a large amount of imported wheat used for animal feed broke into the market before the corn harvest, which also met the domestic demand for feed wheat.
Third, there is no shortage of wheat in the market, despite the divergence in wheat quality. This year, the quality of wheat has declined, the yield has decreased, and the market has **, as this has contributed to the emergence of speculative weather. However, rationally, despite the decline in wheat quality and production this year, there is no shortage of wheat in the market, and since sentiment has fallen, the current situation of oversupply will appear. Therefore, wheat is not suddenly, but in the case of oversupply, the trend is blocked, which is an inevitable trend.
Is wheat production still rising?
Despite the current headwinds, wheat is likely to continue to grow. First of all, as the end of the year approaches, flour consumption is expected to increase. However, the extent to which flour consumption will increase is still unknown, and it is doubtful that previously pent-up demand will be released. Secondly, the cost of wheat acquisition this year is higher, about 2,800 yuan or more per tonne, plus interest, rent and other expenses. Therefore, when wheat is lower than 3000 yuan per ton, the profit is significantly reduced, and the willingness is reduced.
Although some people have turned to corn, the current corn market is also facing many uncertainties, so the number of people holding on to grain has begun to increase, which also limits the decline in wheat. In addition, the purchase of wheat from local reserves has been very strong, which has played a strong supporting role in the market. More importantly, the quality requirements of local wheat reserves are high, which also reflects the market demand for high-quality wheat. Therefore, although it is not obvious that wheat is good in the short term, in the long run, with the further tightening of high-quality grain sources, wheat is still predictable.
Conclusion. In conclusion, there are indeed some early indications as to why wheat is suddenly ** and whether it will continue **. Sluggish demand, limited increases, and the fact that there is no shortage of wheat in the market have all had an impact on the wheat market. However, wheat still has the most potential. Wheat is expected to continue as flour consumption picks up at the end of the year and strong demand for high-quality wheat from local reserves. When investing in wheat, we must remain vigilant, fully understand the market**, and take appropriate risk control measures to protect our interests.
Investing in the agricultural product market, there is no absolute, the market is volatile, investors need to remain vigilant, pay attention to market dynamics in a timely manner, and do a good job in corresponding risk control. At the same time, investors should also do a good job of market analysis and research in order to make informed investment decisions. The factors mentioned in this article are only some of the effects of wheat. Investors should also pay attention to other relevant factors, such as political influences, supply and demand, etc., in order to conduct a comprehensive analysis and evaluation.
Finally, investment is risky, and investors must do so at their own risk. The views expressed in this article are for informational purposes only and do not constitute investment advice. Investors should make independent investment decisions based on their own risk tolerance and investment objectives.