According to the Chinese National Grain Trade Center, China sold 891,938 tonnes of wheat, or 88.5% of the total on offer, in the first auction of state reserves since the new harvest.

Wheat was sold at an average price of 2,366 yuan ($371) per tonne.

That is lower than the current cash prices of wheat.Wheat prices in Shandong province, indeed, were 2,610 yuan per tonne as of last Friday.

Chinese feed producers had bougth up wheat from the state stockpiles to replace corn, as corn prices had soared to record levels.

Meantime, however, China’s corn prices have fallen, pushing feed producers in some regions to switch back to the corn and cut use of alternatives including wheat.

Corn prices on Friday in Shandong province, indeed, were 2,640 yuan per tonne, slightly higher than wheat prices.

However, rains in northern China likely damaged the quality of some of the Chinese corn crop, which could mean more demand for wheat from the feed sector.

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