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November 8, 2011

 

China's wheat market stays flat
 

 

Wheat prices in China's major producing areas were mostly stable in the week to Monday (Nov 7), as pressure on traders to repay loans prompted some to sell wheat inventories.

 

Prices in Hebi, Henan province, were around RMB2,070 (US$326)/tonne, unchanged from a week earlier.

 

In Shijiazhuang, Hebei province, prices were around RMB2,180 (US$343)/tonne, also unchanged.

 

Feed mills have slowed wheat purchases, shifting back to corn as a record harvest brought corn prices down by around 15% since record levels reached in end-September.

 

The government's weekly offer of 300,000 tonnes of feed-grade wheat from state reserves also put pressure on the wheat market in the short term.

 

The government has sold 1.4 million tonnes of feed wheat since March. Before the release, it held about 1.6 million tonnes in state reserves.

 

Demand for wheat usually rises during the winter, when operating rates at flour mills increase "significantly," the Zhengzhou Grain Wholesale Market said in a research note.

 

Wheat demand is expected to show clear signs of recovery in middle of this month, which will likely underpin prices, it said.

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