Market News & Headlines >> Chinese Feed Wheat Demand Plunging

China's 2021/22 use of wheat for livestock feed is expected to be less than half of what it used in 2020/21 as elevated prices have cut demand, analysts and traders in China told Reuters News Service this week.

The volume of wheat used in feed could fall to between 10 and 24 million metric tons (MMT) in the season that began in June 2021, down from more than 40 MMT in the previous year if current price trends persist, five traders and analysts estimated.

"Corn supplies would be sufficient in the new year while wheat prices would remain high, making wheat lose its advantage to substitute corn," said Lv Fengyang, analyst with the agriculture arm of Mysteel, a China-based commodity consultancy. Corn has been cheaper than wheat since October following a strong 2021 harvest.

New government restrictions instituted in December that prohibit feed producers from participating in auctions of state wheat reserves will also slash demand for wheat as a feedstock, said a source at a major trader. Less use of wheat means greater demand for both corn and soymeal.