400k tons of reserve wheat will be auctioned on October 12th, according to China’s state stockpiler.
The wheat to be auctioned ranges from the 2014 to 2017 harvests. Prices for the 2014 reserve wheat start at 2,410 yuan per ton, while the remaining crop years start at 2,500 yuan/ton.
Unlike other rice and soybean auctions, participation terms for the wheat auction is relatively strict. Bidders are required to put up an initial deposit of 1,220 yuan/ton, make full payment within 7 days, and wheat purchased at the auction can only be processed by the company buying it and cannot be resold.
The last national auction of reserve wheat was on April 13th, with 550k tons put up for auction. At that time, the minimum price for 2014 through 2017 crop year wheat was 2,350 yuan/ton.
That auction saw 96.4% of the available wheat purchased by the market. Prices ranged from 2,300 yuan/ton. The vast majority of that auction was 2016 and 2017 wheat in Henan which sold for an average price of 2,862 yuan/ton. As of this week, new crop wheat in Henan is trading at 3,040 yuan/ton.