China Returns to Global Wheat Market, Buys 500K Tons From Australia & Canada as Heat Threatens Crops

China, the world’s top wheat producer, has re-entered the global market with purchases of 400,000–500,000 metric tons of milling-quality wheat from Australia and Canada, traders say, as scorching temperatures threaten yields in key growing regions like Henan province.

Key Developments:

• Heat Wave Risk: Henan—which produces ~30% of China’s wheat—issued crop warnings amid dry, hot conditions, prompting emergency imports.
• Purchase Details:
  • Australia: 4–5 cargoes (55K tons each) for July/August delivery—first Australian wheat deal since 2023.
  • Canada: ~200K tons booked, with talks of more in Winnipeg’s grain circles.
• Avoiding U.S. Wheat: China skipped tariff-hit U.S. supplies, despite historically being a major buyer.
• Barley Boost: Traders report 360K–1M tons of new-crop barley bought from France/Ukraine at $250–254/ton.

Market Impact:

• Price Floor? China’s return could stabilize global wheat prices, which hover near 4-year lows after sluggish demand.
• Stockpile Paradox: Despite large reserves, China’s import rebound signals yield concerns and potential long-term supply gaps.