US DATA: USDA says wheat net export sales more than double on week on Chinese demand

New Delhi — US net export sales of wheat for the week ended March 19 more than doubled on the week to 740,048 mt as a result of demand from China, Department of Agriculture data showed Thursday.

China purchased 485,000 mt of US wheat during the reporting week – the purchase came for the first time since 2017.

Of the total export sales to China, 200,000 mt was for the current marketing year ending May 2020, while the rest was for the next marketing year.

Under the Phase 1 trade deal signed between China and the US in January, the former had agreed to purchase $40 billion-$50 billion of US agricultural goods annually. The deal included new and more specific rules for China to import wheat under its tariff rate quota of 9.64 million mt, which it has not adhered to so far.

Major destinations for the weekly net export sales, apart from China, were South Korea with 146,100 mt, Japan with 144,000 mt, Nigeria with 87,300 mt, Mexico with 64,300 mt, and Indonesia with 53,800 mt. During the week, sales of about 29,800 mt were cancelled from Bangladesh, 24,600 from unkown destinations and 11,700 from Jamaica.

Physical wheat exports from US rose 11.8% on the week but fell 2% on the year to 415,700 mt. Physical exports are shipments of reportable commodities exported against sales.

Physical exports between the start of the marketing year and March 19 totaled 19.5 million mt, up 9.6% on the year.

Total commitments -- cumulative exports plus outstanding sales -- were at 24.71 million mt as of March 19, up 4.7% on the year.

The total commitments now represent 90.8% of the USDA's estimated exports of 27.2 million mt for 2019-20.

Net export sales reflect new sales activity and are considered to be a more accurate indicator of market strength than physical exports.