China's US wheat purchases continue in latest week: USDA

New Delhi — China bought 130,000 mt of wheat from US sellers in the week ended Jan. 21, doubling on its purchases made in the previous week, according to latest data from the US Department of Agriculture, showing that China's interest in US wheat has not waned and imports are expected to continue in the coming weeks.

China's total commitments for US wheat have reached 2.6 million mt in the 2020-21 marketing season that runs from June 2020 through May 2021, according to the USDA export sales data released Jan. 28.

This takes China's commitments to a seven-year high and easily eclipses a record purchase of 1.66 million mt made in 2016-17, according to an analysis of the data.

Of the total 2020-21 commitments, China has already shipped in 1.75 million mt, leaving roughly 831,000 mt of wheat in outstanding sales, the USDA data showed.

China is now the third largest buyer of US wheat in 2020-21, higher than Japan, which traditionally has been one of the biggest buyers of US wheat.

China remains on a buying spree of grains since the early part of 2020 as it continues to build its domestic reserves while a remarkable recovery of its pig population pushes up demand.

China has been releasing its stocks through auctions to meet demand, as soaring domestic corn prices have pushed farmers to replace corn with wheat in pig rations.

"Some feed mills have indicated they are substituting as much as 15-30% wheat for corn. While there was expectation the substitution would help push down corn prices, that has yet to happen," USDA's attache in China said in a separate release.

USDA expects China to import 9 million mt in 2020-21, up 67.3% from the previous year.

US wheat sales

US wheat net export sales in the week to Jan. 21 reached 380,495 mt, up 13.4% from the prior week, led by large bookings by Asian buyers and Mexico, according to the USDA data.

Buyers booked the largest volume of US wheat for delivery in the 2021-22 marketing season that will start June 2021, with weekly sales at 216,000 mt, the data showed.

With the marketing season in its 35th week, total commitments for US wheat shipping to global destinations have now reached 21.8 million mt, hitting 81.3% of USDA's US wheat export estimates for 2020-21.

The USDA is expecting the US to export 26.8 million mt of wheat in 2020-21.

Source: USDA