WORLD WHEAT SITUATION AND OUTLOOK
U.S. wheat prices have fallen $11 per ton lower since early May due to humdrum global demand, and a good start to winter wheat harvest. Export prices (#2 HRW FOB Gulf) are down to about $121 per ton for nearby shipment compared to $150 this time last year. World wheat trade in 1998/99 is forecast down 500,000 tons from last months estimate largely due to lower demand in Pakistan. Russia accounts for most of this months reduction in global stocks while global consumption is expected to be slightly higher. Global stocks-to-use ratio remains relatively unchanged at 22 percent.
The 1998/99 wheat export forecast for the United States is reduced by 1 million tons (to 30 million tons) based on expectations of increased competition and lower global demand.
Australias wheat exports in 1998/99 are expected to be 1 million tons higher based on expectations of larger production. Exports in 1997/98 are forecast to be 500,000 tons higher this month due to aggressive export pace to date.
The 1998/99 wheat export forecast for Canada is expected to be 16 million tons, down 500,000 tons, as a result of extremely tight carry-in stocks. Exports in 1997/98 are expected to be 500,000 tons higher (to 20.5 million tons) based on robust exports over the past several months.
Wheat export forecast for Ukraine is raised 600,000 tons to 1 million tons due to aggressive exports over the past several months. This increase is offset by a reduction in the forecast for Kazakhstans export to 2.6 million tons.
The wheat import forecast for Pakistan is lowered 1 million tons in 1998/99 based on larger production prospects. The crop is projected at 18.5 million tons, which is the largest on record.
South Korean feed wheat demand is expected to continue strong, suggesting higher imports in both 1997/98 and 1998/99. Current year total wheat imports are estimated up 400,000 tons to 3.8 million tons, while 1998/99 imports are forecast to reach 4 million tons.
Mexicos imports in 1997/98 are expected to be 1.9 million tons, up 200,000, due to lower production.
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