The bountiful harvest of summer grain this year is a certainty
According to the data released by the Ministry of Agriculture on June 24th, which was excerpted by the agricultural website directory 5830, as of June 23rd, the planting area for the summer wheat harvest across the country has exceeded 90% of the expected area. The bountiful harvest of summer grain has become a certainty.
"The certainty of a bountiful summer grain harvest sends out a strong signal, indicating that the tension in summer grain production is much more relaxed than expected. This will help stabilize the price of wheat futures. It is expected that the price of grain will not rise too much in the future market," Lü Geguang from the Beijing branch of Shenwan Futures told the Economic Reference News reporter.
In fact, the expectation of rising grain prices was very strong in May. At that time, just before the major winter wheat producing provinces entered the large-scale summer grain harvest period, the possibility of reduced summer grain production triggered concerns about a sharp rise in grain prices.
Minister of Agriculture Han Changfu said during an inspection in Tangshan, Hebei Province on June 24th that this year's summer grain production had withstood severe tests such as the historically rare and extremely severe drought in China's southwestern region and the sustained low temperature and snowy weather in the northern winter wheat region. Achieving a good harvest was hard-won. According to the agricultural situation scheduling of the Ministry of Agriculture, the total output of summer grains this year will exceed 246 billion jin (1 jin = 0.5 kg), close to last year's level. Among them, the output of winter wheat will be over 217 billion jin, slightly higher than last year.
An agricultural industry analyst from a securities company also told the reporter that summer grain is mainly wheat, but the increase in wheat prices this year itself is not large. The news of a bountiful harvest mainly gives everyone a psychological expectation and will not have a significant impact on prices.
In line with this concern, the grain prices in the market indeed rose. According to the monitoring data published by the National Development and Reform Commission on June 24th, in May, the weighted average purchase price of rice, wheat, and corn from both state-owned and non-state-owned grain enterprises in 25 major grain-producing provinces (regions, municipalities) across the country was 99.60 yuan per 50 kilograms, up 1.94% from the previous month and up 11.44% from the same period last year.
As the summer grain harvest proceeded in full swing, the grain purchase market was also lively. Our newspaper reported last week that this year's summer grain purchase faced multiple complex situations, with the market price of wheat clearly higher than the support purchase price. Experts believe that this phenomenon is somewhat abnormal because, according to past rules, once there is a grain bountiful harvest, farmers are eager to convert their grain into money, and the grain purchase price should fall.
Compared with the overall increase in production in 11 major producing provinces (regions), the southwestern region experienced a reduced production due to drought. The summer grain reduction in Yunnan, Guizhou, and Guangxi provinces exceeded one-third. The aforementioned agricultural industry analyst stated that the proportion of summer grain in the southwestern region to the national total is not large. Even if there is a regional increase in grain prices, it is caused by the distribution link, such as insufficient grain dispatching, and has little relation to grain production.
It is understood that the output of summer grain accounts for about one-fourth of China's total annual grain production. To achieve stable development in grain production throughout the year, we still need to look at early rice and autumn grain. Currently, the southern early rice main producing areas are suffering from serious floods. However, market analysts believe that although heavy rains will have some negative effects, it is difficult to draw clear conclusions about the trend of grain production and grain prices based solely on this.
Professor Zheng Fengtian from the School of Agriculture and Rural Development at Renmin University of China analyzed in an interview with the Economic Reference News reporter that more entities are participating in the summer grain purchase this year, not only including the China Grain Reserves Corporation but also COFCO, Hualiang, and other grain-using enterprises, forming a competitive pattern, thus driving up the grain purchase price. Multi-entity purchases benefit farmers, but they also increase the uncertainty of grain price changes.
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(Responsible Editor: 5830 Agricultural Website Directory)