November 28, 2005

 

China wheat prices flat; impact from auctions seen limited

 

 

Wheat prices in major producing regions in China were largely steady in the week to Monday, extending a pattern that has lasted several weeks.

 

In Henan, China's largest wheat-producing province, prices of average quality wheat were quoted about RMB1,400-1,450/tonne Monday, flat from a week ago.

 

Prices of average quality wheat were quoted about RMB1,420-1,460/tonne in Shandong province, mostly unchanged from a week ago.

 

Wheat prices in Hebei province ranged from RMB1,440-1,500/tonne, little changed from a week ago.

 

Trading volumes were mostly at normal levels, although there was a slight difference between regions, traders said.

 

"Attention has been on the frequent outbreaks of bird flu in China that have apparently hit the soymeal, corn and soybean markets," said a Shandong-based trader. "The wheat market was basically uneventful."

 

"There is some talk of wheat auctions in several provinces in the coming weeks, but no nationwide impact is expected because the auctions are relatively small," a Zhengzhou-based analyst said.

 

China's Shandong province Wednesday plans to sell 75,000 tonnes of local wheat reserves stored in five warehouses.

 

"Impact (from the Shandong sale), if any, would be confined to central and northern Shandong where these stocks are stored," the analyst added.

 

"Without any big news in terms of supply or demand, the wheat market would not draw much attention in the near term."