Wheat buyers | Increased demand from China and Brazil unlikely to last
(Reuters) — U.S. exporters loaded and shipped more wheat to global buyers in mid-September than it has in at least the past 23 years.
The U.S. Department of Agriculture said most of the grain headed for China and Brazil.
Exporters shipped 1.204 million tonnes of U.S. wheat in the week ended Sept. 12, including 406,700 tonnes of mostly soft red winter wheat and white wheat to China and 186,400 tonnes of hard red winter wheat to Brazil.
Both countries’ import needs rose this year after adverse weather damaged their domestic crops. Brazil’s needs were further bolstered by weather damage to the crop in Argentina, its largest supplier.
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However, the accelerated shipments were expected and were not likely to persist because other global suppliers should be able to meet a larger share of demand in the coming months.
“It’s mostly Brazil and China, and we know that once these countries finish their demand, there’s not much following,” said Dan Basse, president of AgResource Co.
“The Chinese needed the wheat for blending because their crop was of diminished quality, with some loss. They are showing a little more interest now in the Australian market, which is where they should be.”
Brazil has already bought more U.S. wheat this season than any year since the mid-1980s, and millers there continue to make almost daily price inquiries, U.S. traders said. Their latest purchases have been for October shipment.
However, wheat from Argentina’s next harvest was expected to begin flooding the market by the end of this year, so U.S. shipments to the country are expected to drop.
U.S. wheat export sales in the current marketing year totalled more than 17 million tonnes, up 38 percent from the same point last year.
The USDA is forecasting total U.S. wheat exports at 29.94 million tonnes, a 9.2 percent year-on-year increase.
Season-to-date shipments from the world’s top wheat exporter are 37 percent higher than a year ago.
