China has canceled another batch of US wheat deliveries. This is another such move by the Middle Kingdom recently. Deliveries from Australia were previously canceled. Any such significant move affects futures contracts in Chicago, reports Bloomberg.
The US Department of Agriculture reported that private exporters stopped purchasing 264,000 tons of American wheat. It was another session during which such a decision was announced. The total number of canceled purchases is 504,000 tons, the highest since 1999, according to USDA data.
The first cancellation occurred on March 8, when China canceled a shipment of 240,000 tons of American winter wheat. Another cancellation occurred on March 15 and concerned 264,000 tons. In total, the United States must look for new buyers for over half a million tons of grain. It is worth noting, however, that the United States is not the only exporter that has been surprised by China, and many of the existing contracts are being rapidly terminated. Supplies of Australian wheat also suffered in March. At that time, Chinese importers canceled or postponed approximately 1 million tonnes.
A few days ago, China refused to accept further batches of previously reserved Ukrainian corn. According to Bloomberg, China has already canceled four or five deliveries of Ukrainian corn. The grain was to be shipped from Ukraine between April and June 2024.
Currently, Brazil is becoming the largest supplier of corn to China. China is diversifying its market for the supply of grain raw materials, and in the current geopolitical situation, the Middle Kingdom has also intensified cooperation in grain trade with Russia and Kazakhstan.
Why is China giving up grain supplies?
The days of ever-rising prices for grains and other agricultural commodities appear to be coming to an end, at least for now. China therefore sees an opportunity to buy wheat or corn cheaper.
– This wave of withdrawals from grain supplies shows that China wants to obtain these raw materials cheaper – said Ben Buckner, chief grain analyst at AgResource, in an interview for Bloomberg.
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