You know China snaps up Australian, French wheat as crop damage spurs buying spree

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1. China is set to import record volumes of wheat this year, trading sources say, with rain damage to its crop and worries over dry weather in exporting nations fuelling Beijing’s appetite to buy while prices are low.
2. Traders said China’s frantic buying is likely to support global prices, which have dropped more than a quarter this year based on the Chicago futures benchmark price amid abundant supplies from top exporter Russia.
3. The world’s biggest wheat producer and consumer, China bought around two million metric tons of new-crop Australian wheat in October, for shipments starting in December, trading sources told Reuters.
4. It has also booked about 2.5 million metric tons of French wheat since September, for December-March shipment, they said, noting these were unusually large volumes for this time of year.
5. Overall, China’s 2023 imports are likely to reach around 12 million tons, two Singapore-based traders said, topping 2022’s record 9.96 million tons, and the avid buying is expected to continue into 2024.
6. China has had problems with crop quality this year and Australia, which is the main wheat supplier to China, is going to have a much smaller crop, said one of the Singapore traders, who is at an international company which sells wheat to China.
7. They are buying as much as they can and as early as possible. Supplies are going to eventually tighten, especially from Australia,” the trader said.
8. China has said its wheat crop shrank 0.9% this year to 134.5 million tons, the first decline in seven years despite expanded acreage.
9. After heavy rain battered mature grain in the key central growing region just before the harvest.
10. China’s summer wheat output fell 0.9% this year, official data showed on Saturday, the first decline in seven years after heavy rain hit key growing areas just ahead of the harvest.
11. Output in the world’s top grower of the grain fell to 134.53 million metric tons, the National Bureau of Statistics said, although it added that this year still brought a bumper harvest.
12. Wheat acreage increased by 0.4% but yields were down 1.3%, the statistics bureau said.
13. The output drop is expected to have at most a minor impact on China’s plentiful state stocks, said Huang Tian, an analyst at SDIC Essence Futures.
14. The stocks would also likely forestall any significant impact on domestic food prices, although lower production could drive up imports by one of the world’s top buyers at a time of uncertain global supplies.
15. The global wheat market is closely watching dry weather in key exporters Canada and the United States, and the looming expiry of Ukraine’s wartime shipping deal on Monday.
16. The decline was largely attributed to weeks of heavy rain that battered mature wheat in the country’s top growing province of Henan and surrounding areas just before the harvest.
17. Large-scale rainfall occurred in the northern wheat region in late May, which lasted for a long time, had a large volume, and affected a wide range of areas, resulting in insufficient sunlight during the grain filling period and a decrease in grain weight the statistics bureau said in a statement.
18. In Henan, which produces about one-third of the country’s wheat, the rain caused wheat to germinate in some areas, and the yield dropped significantly it added.
19. Beijing has urged local reserves to buy up some of the damaged grain but purchases have been slow so far, and wheat prices have fallen significantly in recent weeks in Henan .
20. Drought during the latest winter and spring in Southwest China has also reduced summer grain yields in Yunnan and Guizhou provinces and other areas, the bureau said.