China Seeks to Buy US Wheat for First Time in a Year After Truce
ManuelSummary:
China hasn’t purchased any American wheat since early October last year, according to US Department of Agriculture data, and the inquiries come after the Asian nation resumed purchases of US soybeans last week.
Wheat futures in Chicago jumped as China seeks its first US shipments of the grain in more than a year, following orders for soybeans last week as part of a trade truce between the two nations.
A major grains importer in Asia’s largest economy made inquiries over the weekend for US cargoes loading from December to February, according to people familiar with matter, who asked not to be named as they aren’t authorized to speak to media.
Traders reported interest in US soft red winter and hard red winter wheat varieties late last week, in deals that would be a “goodwill gesture to the US,” according to an AgResource Co. note Monday. Speculation was for purchases of 240,000 tons to 400,000 tons, which makes “little economic sense for China,” the note said.
China hasn’t purchased any American wheat since early October last year, according to US Department of Agriculture data, and the inquiries come after the Asian nation resumed purchases of US soybeans last week.
Wheat futures in Chicago jumped as much as 2.1% to a three-month high in Chicago. Basis values for the soft red winter wheat variety in the US river market climbed, according to Commodity3 data. A higher basis can signal buying in cash markets.
Futures briefly erased early gains on concerns that no purchases have been confirmed, but recovered to reach session highs.
“What is odd is that most of the information we have about the deal is coming from the White House, with Chinese authorities saying very little,” StoneX chief commodities economist Arlan Suderman said. “They’re not disputing what the White House is releasing, but rather they’re simply not confirming any of the details.”
In addition, the US government shutdown is halting the release of data on agriculture export sales, making it difficult to track shipments. However, the US Department of Agriculture is beginning to resume some key reports. It plans to issue its global supply and demand outlook — known as the WASDE report — on Nov. 14 after last month’s report was canceled.
Beijing has committed to open its market to US agricultural exports, according to a fact sheet released by the White House over the weekend, which followed the meeting between President Donald Trump and Chinese leader Xi Jinping in South Korea on Thursday. China will also remove tariffs on American wheat imposed in March, the US government said.
China also released a statement following the summit, saying it had reached consensus with the US on expanding agricultural trade, but it didn’t provide details.
The apparent renewed interest in US cargoes comes as China’s overall imports of wheat have fallen to less than a third in the first nine months of this year from the same period in 2024 as Beijing moved to bolster domestic prices due to sluggish demand and ample supply.
Source: Bloomberg
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