Wheat auctions featured a slight growth of sales volume, lower close rate and higher settlement price in Oct. against the month before. In Oct., the winter planting season, the government controlled auction scale and raised starting price to ensure a stable wheat acreage.
Wheat sales by auction registered 988,500 MT in Oct. by Oct. 29, exceeding the month before by 31.19%, parallel to the same period of last year.
The sales of wheat procured at the protective price recorded 998,300 MT in Oct., 237,000 MT more than the month before. In addition, 60,500 MT imported wheat was sold in Oct., nearly a double of the month before.
By Oct. 29, the grain system had sold 62.8114 million MT wheat procured at the protective price in 2006 ~ 2008, accounting for 55.95% of the total amount of wheat procured in this way. Wheat procured at the protective price in 2006 has been sold out. Since Sep., 2007, a total of 1.2233 million MT imported wheat has been sold, but the stock of imported wheat remains large.
By the end of Oct., the nation’s stock of wheat procured at the protective price was estimated to be 49.1 million MT. Plus state reserve, wheat stock totaled about 74.9 million MT in the nation.
Wheat auction settlement price averaged RMB1,670/MT in Oct., up 4.23% over the month before and up 11.37% on the year-on-year basis, attributable to the government’s raise of base price and control of delivery to the market. Adjusting for RMB appreciation, wheat auction settlement price actually rose 10.42% over the month before and 25.14% over the same period of last year, close to the growth of wheat production cost in 2008.
The close rate of wheat auctions was 79.3% in Oct., below the 97.24% in the previous month, but above the 18.5% recorded in the same period of last year.
The grain system is expected to release more stock in the auction market in Nov. for the brisk season of consumption. But considering the current economic depression, wheat auction sales and settlement price are presumed to be stable in Nov. and Dec.
