US white wheat growers profit just as China snaps up supplies
China is scooping up items of U.S. bright white wheat to feed livestock, pressing export forecasts for the grain usually used to make sponge cakes and noodles to a 27-year-high. The purchases will be the most up-to-date disruption in commodities markets caused by Chinese investing in of grains and oilseeds through the corona virus pandemic, pressing prices of main commodity crops to multi-year highs.
China has booked more U.S. light wheat this season than any country aside from the Philippines, the top buyer of the grain. While U.S. producers include long tried out to woo the developing Chinese marketplace for confectionary foods made from bright white wheat flour, the new purchases reflect a dependence on pet feed, Chinese traders and analysts explained.
On Tuesday, the U.S. Agriculture Section (USDA) brought up its forecast for exports of U.S. light wheat to 245 million bushels, the most since 1994, due to good demand from China and South Korea.
While white wheat isn't commonly fed to animals, high corn rates - benchmark U.S. futures reach 7-1/2-time highs last month - managed to get a viable solution in China.
China is scouring the world for feed grains since it rebuilds the world's greatest hog herd, that was ravaged by African swine fever.
"The majority of the imported wheat will probably the feed sector as corn rates are large and there is profit (to import)," explained Li Hongchao, a senior grains analyst with trade webpage Myagric.com.
China signed a good trade deal with the United States in January 2020. Newer trade tensions between China and Australia, which grows a somewhat different really difficult white wheat, also have sent China seeking alternate wheat supplies.
Nine months in to the 2020/21 wheat marketing year begun June 1, 2020, China's purchases of most U.S. wheat classes are in a seven-year high of 2.9 million tonnes, according to USDA's weekly export sales data.
White wheat bookings represent about a third of the full total, at 947,863 tonnes by March 4.
Chinese purchases of U.S. white wheat commenced ramping up in November, after grinding to a near halt in 2018 and 2019 when Beijing and Washington had been in the heavy of a trade war.
