China bought a large volume of American wheat for the first time in over two years.

The U.S. Department of Agriculture (USDA) has reported an agreement for 220,000 t of soft red winter wheat to be shipped to China as part of the U.S. marketing year underway since June 1.

This is the first daily sale of US wheat since November. Daily sales are announced when a single booking of U.S. grains or oilseeds exceeds 100,000 t, which is more often the case for U.S. corn and soybeans.

Large-scale purchases of US wheat by China have been rare in recent years. The last daily sale was in July 2021.

Only seven daily sales of US wheat to all destinations have been confirmed between 2021 and 2022. High market prices and lower U.S. supplies have reduced the U.S. export share, which is expected to fall to a record low of 9% in 2023-24, according to the USDA.

China back in the game

China, on the other hand, is back in the game, accounting for 7% of US wheat shipments in 2022-23 as the fourth-largest destination.

Australia's abundant harvests and close proximity have made it China's leading wheat supplier, accounting for over 40% of imports. But El Nino could prove fatal to the Australian harvest.

China also bought up to 600,000 t of French wheat three weeks ago.

Among the world's top three importers

In recent years, China has been one of the world's top three wheat importers, but these imports represent only a tiny fraction of its annual wheat consumption.

Public support schemes in China generally keep grain prices above world levels, sometimes favoring imports to the detriment of domestic supplies.

Low US wheat prices have recently made it competitive with its rivals, although abundant supplies from Russia, the leading exporter, have kept pressure on the world market.

La rédaction : Journal de la Marine Marchande