China wheat prices stable; expectations of higher prices fade

China's wheat prices in major producing areas were stable in the week to Monday (April 27), as expectations of higher prices faded due to healthy growth of new wheat.

White wheat prices in Heze in Shandong province were around RMB1,870 a tonne, unchanged from a week earlier.

White wheat prices in Anyang in Henan province were around RMB1,890/tonne, also steady from a week ago.

The growth of new wheat, which will be harvested in June, has been better than the market expected, weakening expectations of higher wheat prices, said analysts.

Fading expectations of higher prices have left traders more willing to sell to avoid a piling up of excessive stocks, but processing plants still have high stock levels so they haven't been buying actively yet.

Many processing plants have stopped production due to weak demand for flour, while demand for feedmeal has also remained weak, China Grain Network said in a note.

Weak demand was also reflected in the government's weekly auctions last Wednesday, in which 232,800 tonnes of wheat was sold, 13 percent of the 1.8 million tonnes the government planned to sell.