China cancels US soft red winter wheat deals after prices slide

China cancelled purchases of 130,000 metric tons of U.S. soft red winter wheat, the U.S. Department of Agriculture said, after prices have dropped since Chinese importers went on a buying spree last year.

The USDA confirmed in its daily system that private exporters reported the cancellations.

Wheat prices have eased amid stiff competition for global sales from Russia, the world’s top exporter.

Chicago Board of Trade soft red winter wheat futures Wv1 fell to $5.28-1/2 per bushel on Thursday, the lowest since August 2020 for the most actively traded contract, before recovering.

The contract is down about 18% from a four-month high reached in early December, around the time China’s weekly purchases of U.S. wheat hit an all-time high. Chinese importers also made sizable purchases of French and Australian wheat last year after rain damaged China’s wheat crop.

China on Tuesday expanded its budget to stockpile grains and edible oils this year, as it aims to reduce its dependence on imports and improve food security.

Low prices in an Algerian import tender for wheat this week reflected increased competition for global export business from Black Sea supplies.

Egypt, the world’s biggest wheat importer, issued a tenderto buy wheat on Wednesday after Chicago and European prices set 3-1/2 year lows. Egypt canceled the tender on Thursday.

Tags: China, prices, wheat, USA