Move FM Regional news

BEIJING, China: Amid rising global stockpiles dragging down prices, Chinese wheat importers have canceled or postponed some one million metric tons of Australian wheat purchases.

With international prices trading close to three-and-a-half-year lows, last week, the U.S. government reported canceling more than 500,000 metric tons of U.S. wheat exports to China, the world’s leading wheat buyer.

After adverse weather damaged its crop last year, China increased its wheat imports last year, mainly from Australia, the U.S., France, and Canada.

However, after Russia, the world’s top exporter, began flooding the global market with cheap wheat as it drew down inventories ahead of an expected bumper harvest, prices dropped, leading China to buy again to lock in lower prices.

Due to high supply levels, benchmark Chicago wheat futures have fallen more than 14 percent in 2024 to their lowest since August 2020. The market was trading down 1.4 percent at 09:06 GMT on March 14.

Andrew Whitelaw at agricultural consultants Episode 3 in Canberra, said China, the leading buyer of Australian wheat, may have booked the cargoes four to five months ago when prices were higher.

“Cancelling cargoes is a bearish indicator. Whether they are doing it to buy again cheaper or because there is less demand, it is still a bearish view on the market,” Whitelaw said.

Refinitiv data showed that for the first time since August 2020, benchmark Russian wheat export prices dropped below US$200 a metric ton ($5.44 per bushel) this week, the lowest early March price since 2017.

The U.S. Department of Agriculture said Russia will export a record 51 million metric tons of wheat in the crop year ending May 31, up from 47.5 million a year ago.