China's wheat prices stay stable

Wheat prices in China's major producing areas were stable in the week to Monday (May 24), with farmers staying on the sidelines and rising corn prices providing support to wheat.

Wheat prices in Xuzhou in Jiangsu province were RMB1,970 (US$288) a tonne, largely unchanged from a week ago. Prices in Zhengzhou, Henan province, were unchanged at RMB1,980/tonne (US$290), said analyst Hai Yang.

"The new wheat harvest is about to go on the market," she said. "With corn prices going up fast, it's providing support to wheat."

Wheat prices usually soften in warmer weather as flour consumption falls.

Supply may also pressure prices downward. Wheat output in 11 major producing provinces, which account for 90% of China's total output, is expected to rise slightly to 113.5 million tonnes this year, State Administration of Grain Deputy Chief Zeng Liying said.

But the rally in corn is alleviating downward price pressures, leaving prices mostly flat.

There is not a direct relationship between corn and wheat prices, but corn's sharp rise - due to tight output - has led to concerns that wheat will be relatively scarce as well, Hai said.