March 15, 2021


White wheat growers in the US benefit from China's demand for livestock feed


White wheat growers in the United States are benefiting from China's growing demand for the grain to feed its livestock, pushing white wheat export projections to its highest in 27 years, Reuters reported.


China has booked more white wheat from the US, second only to the biggest buyer of the grain, the Philippines. Chinese traders and analysts said the recent purchase are a result of growing demand for livestock feed.


The US Department of Agriculture (USDA) increased its white wheat exports forecast to 245 million bushels, the highest since 1994 thanks to strong China and South Korea demand.


White wheat is not commonly used as livestock feed, but after corn prices in benchmark U.S. futures reached 7-1/2-year highs last month, white wheat has emerged as a alternative to China.


China continues to ramp up its purchases of grains around the world as it looks to rebuild is massive swine herd affected by African swine fever.


China has been looking for alternative supplies for wheat following trade tensions with Australia, which supplies a different hard white wheat.


According to USDA's weekly export sales data, China's purchases of all U.S. wheat classes are at a seven-year high of 2.9 million tonnes nine months into the 2020/21 wheat marketing year beginning June 1, 2020. White wheat accounts for a third of the total at 947,863 tonnes as of March 4.


China increased its purchases of white wheat from the US in November after trade came to a near stop in 2018 and 2019 during the US-China trade war.


Before 2018, China purchased 228,000 tonnes of US white wheat in 2016/2017 and 307,000 tonnes in 2017/2018.


The white wheat industry in the US has been cultivating a relationship with China's flour millers and bakers, especially as US soft white wheat grown in the Pacific Northwest are ideal for cakes and steamed breads.


The export market for white wheat has sent cash prices at the Portland, Oregon export hub at around US$7.50 a bushel. This is $2 higher or 35% up from July post-harvest.


Cordell Kress, a white wheat grower from Idaho, said a third of his projected 2021 harvest has already been sold and some of his 2022 white wheat has already been pre-sold.


Even with increased China purchases, grain merchandisers and farmers said US white wheat acres will not expand in Spring, especially because of strong prices from competing crops such as canola.


- Reuters