China is scooping up supplies of U.S. white wheat to feed livestock, pushing export forecasts for the grain usually used to make sponge cakes and noodles to a 27-year-high.
The purchases are the latest disruption in commodities markets caused by Chinese buying of grains and oilseeds during the coronavirus pandemic, pushing prices of major commodity crops to multi-year highs.
China has booked more U.S. white wheat this year than any country besides the Philippines, the top buyer of the grain. While U.S. producers have long tried to woo the growing Chinese market for confectionary foods made from white wheat flour, the recent purchases reflect a need for animal feed, Chinese traders and analysts said.
On Tuesday, the U.S. Agriculture Department (USDA) raised its forecast for exports of U.S. white wheat to 245 million bushels, the most since 1994, due to strong demand from China and South Korea.