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Russia is flooding the global market with cheap %Wheat, pushing prices in the U.S. and Europe to their lowest levels in more than three years.

Russia, which is the world's top wheat supplier, is drawing down its inventories ahead of an expected bumper harvest this summer.

The move by Russia has led China to cancel 500,000 tons of U.S. wheat that it had contracted to purchase this year.

Russia is likely to export a record 51 million tons of wheat this year, up from 47.5 million a year ago, according to forecasts from the U.S. Department of Agriculture (USDA).

Refinitiv data shows that Russian wheat export prices are currently below $200 U.S. a metric ton ($5.44 U.S. per bushel) for the first time since 2017.

At the same time, the USDA has confirmed that China cancelled 504,000 metric tons of U.S. soft red winter wheat that it had agreed to purchase last December when prices were higher.

Consequently, the USDA has cut its estimate of U.S. wheat exports for the year ahead by 15 million bushels to 710 million total bushels.

If the new estimate proves accurate, it will mark the lowest annual exports of U.S. wheat in more than 50 years.

Weak global wheat prices are yet another blow to farmers in the U.S. who are already struggling with a drop in corn and soybean prices, both of which are at their lowest levels since 2020.