December 5, 2023
China makes largest US wheat purchase since 2020
China has confirmed its most substantial acquisition of United States wheat since at least 2020, securing 440,000 metric tonnes of the grain, according to the US Department of Agriculture (USDA), Nasdaq reported.
This substantial purchase follows challenges in China's 2023 wheat crop, marked by quality issues arising from heavy rainfall in crucial growing areas just before the harvest.
The significant transaction provides a much-needed boost for the struggling US wheat exports, which the USDA had projected to reach a 52-year low in the 2023/24 marketing year that commenced on June 1.
In response to this positive news, the Chicago Board of Trade March wheat contract (WH24) experienced a 3% rally at midsession, reaching a six-week high at US$6.26-1/2 a bushel. Benchmark CBOT wheat futures (Wv1) have been recovering since hitting a three-year low in September.
This latest purchase is part of a series of acquisitions by China of US soft red winter wheat, starting from October 3 when the USDA confirmed sales of 220,000 tonnes. Subsequent purchases included 181,000 tonnes on October 13 and another 110,000 tonnes on November 22.
China, the world's largest wheat producer and consumer, has also been diversifying its wheat sources with acquisitions from Australia and France. Analysts suggest that China's need to import milling wheat is driven by the necessity to blend it with domestically damaged supplies due to rain.
- Nasdaq
