It is usually the slack season of wheat trading following the Spring Festival, but wheat auction deals and price went up markedly in Feb. this year, accredited to concerns over serious drought in wheat regions and the government’s raise of auction base price. With the ease of drought, plus the government’s verification of grain stock in spring, wheat auctions are expected to cool down in March.
By Feb. 25, a total of 4.9399 million MT wheat was sold by auction in Feb., 67.26% more than the month before and 4.3237% more than the same period of last year. Taking into account of grain depots’ sales of “wheat procured at the protective price” through other channels, wheat sales totaled 5.1311 million MT in Feb., much more than the month before.
159,700 MT imported wheat was sold in Feb., much more than the 3,400 MT in the month before.
Wheat auction price averaged RMB1,765/MT in Feb., up 2.85% over the month before and up 15.85% on the year-on-year basis. The government raised wheat auction base price by RMB40/MT in Feb. over the month before, accounting for 81.71% of the growth of the settlement price. Considering the currency value change, wheat auction price actually rose 2.68% in Feb. over the month before and 31.55% over the same period of last year.
The close rate of wheat auctions in Feb. was 78.02%, above the 64.78% scored in the month before and above the 20.74% recorded in the same period of last year.
By Feb. 25, the government sold 11.5218 million MT wheat procured at the protective price, accounting for 27.27% of the year’s total wheat procurement, below the 37.3% scored in the same period of last year.
By the end of Feb., the stock of wheat procured at the protective price was estimated to be 37.1216 million MT. Taking into account of state reserve, the nation’s total wheat stock was about 47.7693 million MT.
1.4335 million MT imported wheat was sold by auction from Sep. to Feb. but stock of imported wheat was still large.
