Cash wheat market continues to move higher

Wheat prices in Hubei province hit 3,127 yuan per ton this week, up 12 yuan per ton compared to the previous week. 

According to Hubei’s Ministry of Agriculture, the market has become more bullish on wheat, with flour millers bidding aggressively for reserve auction wheat which has driven up prices. 

A relatively small auction of just 1750 tons of 2019 reserve wheat was all purchased by the market with the price rising to 245 yuan per ton higher than the reserve price. 

Companies are still paying a premium for previous wheat harvests. The recent harvest of wheat is cheaper due to concerns about quality. 

Oil prices in Hubei were weaker over the past week with rapeseed oil falling 50 yuan per ton to 14,060 yuan per ton and soybean oil falling 140 yuan per ton to 10,440 yuan per ton. Market demand for vegetable oil remains weak against ongoing covid restrictions and increasing imports are adding to market bearishness. 

The rice market was stable to slightly stronger over the past week, but it is reported that traders are more eager to sell and clear inventory due to worries about covid lockdowns disrupting logistics.