WORLD WHEAT SITUATION AND OUTLOOK
By early July, U.S. wheat prices had moved $3/ton higher than mid-June, despite harvest pressure and lackluster import demand. Prices had been supported by weather uncertainty in corn and spring wheat growing regions. Export quotes for #2 HRW FOB Gulf are about $124/ton for July shipment compared to $140 this time last year. World wheat trade in 1998/99 stands at 97.7 million tons, 500,000 tons lower than last months estimate. Global stocks are down one million tons, with Russia accounting for most of this reduction. Global consumption is expected to be slightly higher, while the stocks-to-use ratio remains relatively unchanged at 21.8 percent.
The 1998/99 wheat export forecast for the United States is reduced by 1 million tons (to 29 million tons on weak export prospects for white and soft red winter wheat due to ample supplies in competing exporters and lower demand in several importing countries.
The wheat export forecast for Turkey in 1998/99 is raised 1 million tons (to 2 million tons) due to extremely large production prospects. The crop is expected to reach 18 million tons, the largest level on record. The 1997/98 export forecast is raised 500,000 tons (to 1.5 million tons) on robust exports of wheat flour throughout the marketing year.
Reduced production prospects in Argentina suggest a 500,000 reduction in the 1998/99 wheat export forecast. Exports for the July/June year are expected to reach 8.0 million tons, which is 1 million tons below last years level.
Wheat imports by Iran are anticipated to be 500,000 tons lower (5 million tons) in 1998/99 as a result of lower demand in 1997/98 and revisions in consumption and stock levels. Last years estimate is reduced by 500,000 tons, to 4 million tons on slow import pace during the last half of the marketing year.
South Korean wheat import forecast is reduced 300,000 tons in 1998/99 to 3.7 million tons due to lower availability of feed quality wheat.
The import forecast for Mexico is raised 200,000 tons, to 2.1 million tons in 1998/99 and 1997/98 respectively, due to increased import demand.
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