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China’s wheat auction soars on high corn prices, coronavirus fears

China sold nearly all the wheat offered at its regular auction of state reserves last week, far more than usual as feedmakers sought alternatives to corn and rising coronavirus cases sparked supply fears.

Some 3,939,732 tonnes of wheat, or 99.74% of the total offer, was sold at auction, the National Grain Trade Center said in a statement on Monday.

“It (the auction) was crazy, most of the wheat was bought by traders who were auctioning for the feed makers,” said a trader who purchases wheat for milling plants.

“We could only watch,” added the trader, who said feed buyers were willing to pay whatever was needed to secure supplies. He declined to be named as he was not authorized to speak to the media.

China’s corn futures traded on Dalian Commodity Exchange continued to rise on Monday after hitting record levels last week. China sold off its once massive corn reserves last year, while typhoons hurt the most recent harvest in the country’s northeast.

Just over half the wheat offered at the previous week’s auction was sold, while December sales ranged from around 12% to 18% of stock offered.

The average selling price at last week’s wheat auction was 2,504 yuan ($386.27) per tonne, up 7% from just two weeks ago, according to data from the trade centre.

“People probably worried about supply and logistics with the increased (coronavirus) case numbers,” said Darin Friedrichs, senior analyst at StoneX, adding that there may have been some panic buying last week to secure supplies.

China has reported a surge of new coronavirus outbreaks in recent weeks, prompting lockdown in major grains producers Hebei and Heilongjiang provinces, which has disrupted logistics and industrial activity.

The table below shows the volume of wheat sold at weekly auctions from China’s state reserves since June 22 last year.

Auction      Total up   Total     Percentag  Average
 date         for sale   sold      e sold     price
              (tonnes)   (tonnes)             (yuan per
                                              tonne)
      13-Jan  3,949,934  3,939,73     99.74%       2,504
                                2             
    6-Jan-21  4,023,775  2,099,19     52.16%        2365
                                9             
      30-Dec  4,038,152   582,153     14.41%       2,344
      23-Dec  4,033,267   484,427     12.01%       2,341
      16-Dec  4,020,220   593,161     14.75%       2,342
       9-Dec  4,030,811   649,373     16.11%       2,339
       2-Dec  4,032,878   715,244     17.73%       2,342
      25-Nov              674,796     16.76%       2,340
              4,024,180                       
      18-Nov                          17.62%       2,339
              4,019,884  708,462              
      11-Nov                          21.57%       2,336
              3,988,788  860,535              
       4-Nov                          56.10%       2,343
              4,000,754  2,244,64             
                               0              
      28-Oct                          67.74%       2,356
              3,983,946  2,699,06             
                               8              
      21-Oct                          73.41%       2,357
              3,984,332  2,924,93             
                               9              
      14-Oct                          41.19%       2,347
              4,015,809  1,654,11             
                               5              
      28-Sep                          12.20%       2,342
              3,013,958  367,930              
      23-Sep                           7.49%       2,312
              3,041,332  227,835              
      16-Sep                           7.81%       2,310
              3,053,816  238,510              
       9-Sep                           8.86%       2,303
              2,075,956  184,083              
       2-Sep                           5.72%       2,351
              2,029,753  116,176              
      26-Aug                           7.71%       2,348
              2,026,128  156,314              
      19-Aug                          15.54%       2,359
              2,051,998  318,897              
      12-Aug                          38.50%       2,360
              1,117,052  430,129              
       5-Aug                          20.48%       2,346
              1,046,249  214,342              
      29-Jul                          20.93%       2,328
              1,098,145  229,923              
      22-Jul                           1.76%       2,367
              1,040,199   18,395              
      15-Jul                           5.85%       2,346
              1,042,977   61,109              
       8-Jul                           2.76%       2,364
              1,058,876   29,285              
       1-Jul                           0.83%       2,337
              1,049,901    8,780              
      22-Jun                           0.37%       2,316
              1,058,852    3,959

Source: Reuters (Reporting by Hallie Gu and Shivani Singh; Additional reporting by Beijing Newsroom; Editing by Shailesh Kuber and Richard Pullin)

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