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Business Recorder
28-05-2025
- Business
- Business Recorder
Wheat rebounds on lower-than-expected US crop ratings
CANBERRA: Chicago wheat futures rose on Wednesday after US crop condition ratings came in below market expectations, but prices remained under pressure as improving weather conditions in several major producers bolsters the supply outlook. Corn futures also rose while soybeans edged lower. The most active wheat contract on the Chicago Board of Trade (CBOT) was up 1% at $5.33-1/2 a bushel, as of 0337 GMT. A short-covering rally lifted wheat from a five-year low of $5.06-1/4 earlier this month, but actual or forecast rain in the US Plains, parts of Europe, the Black Sea region and China have underlined expectations for plentiful supply, with prices plunging 2.6% on Tuesday. The US Department of Agriculture crop ratings released after market close on Tuesday showed only 45% of US spring wheat in good to excellent condition, below even the lowest in a range of analyst expectations. The USDA also said 50% of US winter wheat was in good to excellent condition, beneath the average analyst forecast but still the highest rating for this time of year since 2020. But global wheat demand is low and the risk to crop production will reduce further as northern hemisphere harvests ramp up, said Rod Baker, an analyst at Australian Crop Forecasters in Perth. PASSCO's wheat reserves will not be released into open market: minister 'Hefty short positions mean there's still time for a rally,' he said. 'But each day that goes by it gets less likely.' Commodity funds hold a large net short position in CBOT wheat and were net sellers on Tuesday, traders said. In other crops, CBOT soybeans were down 0.1% at $10.61-3/4 a bushel and corn climbed 0.3% to $4.60-3/4 a bushel. Corn and soybeans are under pressure from expectations of a large corn and soybean crop in Brazil, with agribusiness consultancy Datagro this week increasing its forecasts for the country's 2024/2025 crops. The USDA rated 68% of the US corn crop as good to excellent in its first condition ratings for the 2025 season, below the average estimate of 73% in a Reuters analyst poll.
Express Tribune
11-05-2025
- Business
- Express Tribune
China buys wheat over crop damage risk
Listen to article Chinese buyers bought between 400,000 and 500,000 metric tons of wheat from Australia and Canada in recent weeks, traders said, as heat threatens to damage crops in China's agricultural heartlands. China is the world's top wheat grower and also imports large amounts of grain when domestic supply falls short of demand. Earlier this week, Henan province, which grows about a third of China's crop, issued a risk warning as hot, dry weather threatened the wheat growing in its fields. Chinese buyers have purchased four or five 55,000-ton shipments of wheat from Australia for delivery in July or August and around 200,000 tons from Canada, sources at two major trading firms in Australia said. The wheat is of milling quality. The bookings from Australia were the first made by China from the country since last year, said one of the traders. Cofco, the state-owned Chinese firm that handles most of the country's wheat imports, did not immediately respond to a request for comment. China has in recent years been one of the world's biggest wheat importers, buying in around 11 million tons worth $3.5 billion in 2024. Australia and Canada are typically its biggest suppliers. But shipments slowed sharply after China reaped large wheat and corn harvests last year and have since remained low. China delayed or redirected shipments from Australia earlier this year and imported less than a million tons of wheat in the seven months to March 31, Chinese customs data accessed through Trade Data Monitor show. One of the sources said their company had lowered its forecast of Chinese 2025 wheat production by around 5 million tons but there was no guarantee that more purchases would follow because China has large wheat inventories. "China is well self-sufficient in feed grains this crop year with heavy stocks," said Rod Baker, an analyst at Australian Crop Forecasters in Perth, adding that faltering economic growth in China was also depressing demand for grains. Talk of Canadian wheat sales to China has echoed around agricultural business circles in Winnipeg, Canada's grain industry capital, according to traders. Few concrete details on the sales have emerged. Chinese buyers would have avoided buying US wheat due to tariffs and the trade war between Washington and Beijing, one trader said. China in the past has been a top destination for US wheat sales. The drop-off in Chinese imports earlier in the current 2024/25 season had contributed to subdued international wheat prices, with benchmark futures in Chicago still near a four-year low touched last July. Along with weather risks to China's upcoming harvest, attractive prices may have lured Chinese importers back into the market as the 2025-26 season approaches, traders said. Chinese importers also booked a large amount of barley, according to traders. Some said that six panamax bulk carriers carrying around 360,000 tons of French or Ukrainian new-crop barley had been sold for delivery in July or August, with others putting the volume much higher at around 1 million tons, also for shipment this summer. Deflation deepens Meanwhile, China's factory-gate prices posted the steepest drop in six months in April while consumer prices fell for a third month, underlining the need for more stimulus as policymakers grapple with the economic toll from a trade war with the United States. A prolonged housing market downturn, high household debt and job insecurity have hampered investment and consumer spending, keeping deflationary pressures alive. Now, the economy is also facing increasing external risks from trade barriers. However, there are hopes for a de-escalation of tensions as US-China trade talks begin in Switzerland on Saturday. The Producer Price Index (PPI) dropped 2.7% in April year-on-year, worse than a 2.5% decline in March but was less than economists' forecast for a 2.8% fall, National Bureau of Statistics data showed on Saturday. "China still faces persistent deflationary pressure," said Zhiwei Zhang, Chief Economist at Pinpoint Asset Management. "The pressure may rise in coming months as exports will likely weaken." "Even if China and the US can make progress and cut tariffs in trade negotiations, tariffs are unlikely to go back to the level before April," Zhang added. "More proactive fiscal policy is necessary to boost domestic demand and address the deflation problem."
