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China makes year's second large purchase of US wheat

BEIJING: China bought as much as 650,000 tonnes of US wheat last week prompted by falling prices, a government think-tank said. 

This was the second large-scale purchase of US wheat by the world's top wheat producer this year, bringing its total buying to about 1.5 million tonnes, the China National Grain and Oils Information Centre ( 
CNGOIC) said on its website (www.grain.gov.cn). 

The latest US wheat was bought at between $320 to $328 per tonne CIF for delivery from July to September. The US price was about 11.6 per cent cheaper than domestic wheat, said the centre. 

Beijing is refilling its depleted state wheat reserves, while some state wheat quality was also deteriorating. Traders said Sinograin, the state stockpiler which made the purchases, was looking for another 2-3 million tonnes. 

The the 
US Department of Agriculture (USDA) on Friday confirmed only 180,000 tonnes of US soft red winter wheat were sold to China, but traders expected more to be announced. 

Chicago Board of Trade wheat fell to a more than 1-month low last week after forecasts for crop-boosting rain in some areas. 

The centre last month reported that China bought 14-16 cargoes of US SRW wheat, which was confirmed later by the USDA. 

China is expecting its domestic wheat harvest due in June to rise only 1.5 per cent to 116.5 million tonnes after bad weather damaged domestic crop in some areas, analysts said. 

Beijing also set its 2013 minimum wheat purchase price at 2,240 yuan ($370) per tonne, which will shore up domestic wheat prices above the level.