Compared with the trend of global wheat last year, this year's wheat has obviously dropped a lot.
Last year, affected by the conflict between Russia and Ukraine, the global wheat price soared rapidly, reaching a record high of-0 1.363.50 cents per bushel/kloc.
However, with the crazy interest rate hike by the Federal Reserve and the gradual digestion of the market's influence on the Russian-Ukrainian conflict, the price of wheat has also declined.
This year, this trend is more obvious.
At present, not only the international wheat price has fallen in an all-round way, but also the domestic wheat has plummeted.
For example, the once soaring Chicago wheat futures price recently fell to $7.2/bushel, a decrease of 5.85% this month.
The price of American No.2 hard red winter wheat was $394/ton, down $8; The price of American soft red winter wheat was 330 USD/ton, down 1 1 USD.
In addition, French wheat and Argentine wheat also fell again and again.
In just one year, the trend of wheat showed a situation of "two days of ice and fire". So, why did wheat fall across the board? Has the risk of food crisis been lifted?
There are four main reasons for the overall decline of global wheat:
First of all, the impact of the Russian-Ukrainian conflict is indeed weakening.
On the one hand, this weakening is because the conflict between Russia and Ukraine has lasted for one year, and the market has predicted the impact of this incident, so the disturbance to the market is relatively limited.
On the other hand, the most direct impact on the grain market is the grain transportation channel of the Black Sea port. The port agreement will face the risk of expiration again in mid-March. However, from the perspective of recent news, concerns about the interruption of the Black Sea port have temporarily eased, market sentiment has stabilized slightly, and wheat supply expectations have temporarily eased.
Second, the global wheat supply is increasing.
Although Ukraine is an important wheat exporter, it is a foregone conclusion that Ukraine's grain output will be reduced due to the conflict. On the other hand, the world's major wheat producers are expecting to increase production one after another, thus offsetting part of Ukraine's wheat production reduction.
For example, the US Department of Agriculture held a Outlook Forum last week, in which it was mentioned that the wheat planting area in the United States is expected to reach 49.5 million acres in the new planting season, up 8.3% year-on-year, setting a new high in seven years.
The average yield is also expected to increase, reaching 49.2/ bushel, up 6% year-on-year.
Therefore, it is estimated that the wheat yield in the United States will reach 65.438+0.88 billion catties in the new year, up by 654.38+0.4% year-on-year.
This expectation is not groundless, because from the recent weather, the northern and central and western regions of the United States will usher in snowfall, which will help winter wheat avoid freezing damage and provide sufficient water for greening.
In the next March, it is expected that there will be seasonal rainfall, which will also improve soil moisture and contribute to the growth of wheat.
And the data shows that the drought in Kansas, the number one wheat producing area in the United States, has also eased significantly compared with the previous week.
All these provide support for the expected increase in wheat production in the United States.
As the largest wheat producer in the world, Russia has a bumper harvest. According to the latest forecast of the US Department of Agriculture, the Russian wheat output in 2022/23 is 9 1 10,000 tons, a record high.
In addition, according to the forecast of relevant institutions, the wheat output in the new season in the EU is expected to reach 654.38+29.7 million tons, an increase of more than 3% over the same period last year.
Under the expectation of increasing wheat production in many countries, the global wheat supply is expected to increase, and the supply and demand are expected to be loose.
Third, the ultra-low price of Russian wheat impacts the market.
Russian wheat not only has a bumper harvest, but also has a low counter-offer. The reason is that Russia sells wheat at a discount because of various sanctions.
Judging from the recent export bidding, Egypt, the world's largest wheat importer, bought 240,000 tons of Russian flour wheat through bidding last week, and the delivery price was about 3 17.5 USD, which was significantly lower than that of French wheat.
This is also the fourth consecutive time that Egypt only bought Russian wheat in the tender. It can be seen that although Russia's trade exports have been subject to multiple sanctions, the low price is indeed very attractive to the market.
Fourth, the dollar strengthened and commodities generally fell.
Since the beginning of February, driven by risk aversion, the US dollar has been constantly rebounding, and the price space of bulk commodities has been suppressed, which has also made the trend of wheat continue to fall.
The global wheat is weak and volatile, and the domestic wheat has fallen sharply recently. This round of decline exceeded many people's expectations.
Years later, wheat began to decline after a period of firmness. Originally, it was temporarily stable after falling below the 1.6 yuan/kg mark, but recently it suddenly continued to fall in a large area. At present, the quotations of many enterprises are close to 1.56 yuan and 1.55 yuan, and the downward trend seems to have not stopped, that is to say, it will dive to 1.5 yuan/kg, and some people even think pessimistically.
For a time, "demand theory" and "import theory" came one after another.
No matter whether these statements are right or wrong, the market of wheat can not be separated from two levels in the end:
The first is the supply and demand level.
Great changes have taken place in wheat supply and demand.
First, as wheat withdrew from substitution and returned to rations, the demand began to become single; Secondly, the following year was in the off-season, and the downstream flour consumption was sluggish, unable to support wheat; Third, consumption is recovering after the epidemic, but the recovery rate is not as fast as expected, which also weakens the demand for wheat.
Wheat continued to show a pattern of strong supply and weak demand, and wheat prices fell.
The second is the policy level.
Whether imported or domestic, the impact on wheat is limited.
In terms of policy, three factors are considered:
The first is the protection of domestic grain. Every country will set up trade barriers to imported grain, set quotas to protect its own grain, and avoid a large number of imported grain from impacting its own market.
Secondly, we should consider domestic planting costs and farmers' income to protect planting enthusiasm.
The third is to consider the relationship between wheat and corn. If the price of wheat falls excessively, it will inevitably flow into the feed again.
Therefore, although the domestic wheat has fallen alarmingly, there is a policy as the bottom, and the probability of a big drop is very small.
In addition, although the global wheat is falling, it does not mean that the global food supply is sufficient, because there are still many uncertain factors, such as the evolution of the Russian-Ukrainian conflict, such as extreme weather, such as planting costs and so on.
The USDA predicts that the annual average price of wheat in the United States will drop to $8.50 per bushel in the new season, but this price is still the second highest in history.
Coupled with the dry weather in North Africa, one of the largest wheat importing regions in the world, the wheat harvest may decline, so the import demand is increasing.
Although food prices are falling, it is more a bubble before the retreat. The increase in the bottom cost is a foregone conclusion, and it is more important to exchange food in times of peace. The short-term decline is not gratifying. In the medium and long term, food prices are still fluctuating at a high level.
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