Chinese buyers canceled agreements for the supply of 1 million tons of wheat from Australia

Chinese importers are canceling or postponing agreements under which 1 million tons of Australian wheat should have been delivered in February-April, Reuters reports.

According to traders, some deals have been canceled completely, while other delivery dates have been postponed to the second and third quarters. In many cases, buyers who canceled or postponed delivery must pay a penalty.

After heavy purchases late last year and early this year, China is cutting supplies as global wheat prices plunge to a 3.5-year low.

The underlying wheat futures on the Chicago SWOT in 2024 fell by 14% to the lowest level since August 2020 against the background of large global stocks and active exports of cheap wheat from the Russian Federation, which intensified sales in anticipation of a new high harvest.

Export prices for Russian wheat fell below $200/t for the first time since August 2020, making it the lowest early March price since 2027.

We will remind that last week the USDA announced the cancellation of the export supply of more than 500,000 tons of American wheat.