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WORLD WHEAT SITUATION AND OUTLOOK
U.S. wheat prices moved slightly lower over the past month due to sluggish import demand. Export quotes for #2 HRW FOB Gulf are about $124/ton for nearby shipment compared to $140 a year ago. World wheat trade in 1998/99 is forecast at 95.8 million tons, nearly 2.0 million tons lower than last month’s estimate. Global stocks are up 3 million tons, with the U.S. and the EU accounting for most of this increase. Global consumption is expected to be more than 1 million tons lower this month, while the stocks-to-use ratio stands at 21.5 percent.
Exporters
Wheat exports by the United States are forecast at 28.5 million tons, 1.5 million tons below last month’s estimate based on lower global imports and expectations that food aid shipments to Russia and other needy countries will extend beyond the 1998/99 marketing year.
Wheat exports by the European Union are forecast at 16.5 million tons, a reduction of 1.5 million tons, based on expectations of smaller flour and product exports as well as delays in the Russian food aid program. Food aid shipments will likely extend beyond the 1998/99 marketing year, once the specific details are fine-tuned.
Projected Argentine 1998/99 wheat exports are up 500,000 tons to 7.5 million tons on higher production prospects due to better-than-expected yields in key growing regions. While Canada’s wheat exports are lowered 500,000 tons (15 million tons) due to slow export shipments to date.
1998/99 wheat exports by Poland are forecast at 500,000 tons, 400,000 tons higher than last month, due to the governments recent sale of feed quality reserve stocks. The bulk of this wheat will likely be shipped to South Korea. Also, wheat exports by Ukraine are expected to be 2.1 million tons, an increase of 950,000 tons due to robust shipments during the first half of the marketing year.
Importers
1998/99 wheat imports by Russia are lowered 1 million tons due to delays in the U.S. and EU food aid programs. U.S. food aid shipments to Indonesia are expected to slip past the end of the marketing year, resulting in a 300,000 ton lower import estimate (2.2 million tons).
Iran’s wheat imports are expected to be 3.0 million tons, 500,000 tons below last month due to sluggish import pace to date. Likewise, wheat imports by Yemen are forecast 300,000 tons lower, to 2.4 million tons.
Wheat imports by Algeria in 1998/99 are expected to be 4 million tons, down 600,000 tons from last month based on larger-than-expected production, while Morocco’s wheat imports are raised 300,000 tons, to 1.8 million tons because of strong pace to date.
1998/99 commercial wheat imports by Pakistan forecast 400,000 tons higher this month to 2.6 million tons. South Korea’s wheat imports are projected at 4.4 million tons, up 200,000 tons from last month because of increased demand for feed quality wheat.
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