WORLD WHEAT SITUATION AND OUTLOOK
U.S. wheat prices drifted higher over the past month, despite improved weather conditions in the winter wheat growing areas and USDAs March 31 Prospective Plantings report that indicated durum seeded acreage in the Northern Plains would be larger-than-expected. The upward price movement has been based on trade expectations that the United States and China would resolve the long-standing TCK issue and trade sanctions would be lifted on U.S. agricultural exports to Iran. In early April, export quotes for #2 HRW FOB Gulf averaged about $120/ton for nearby shipment compared to $130 a year ago. World wheat trade in 1998/99 is forecast at 95 million tons, slightly lower than last months estimate. Global consumption is expected to be more than 5 million tons lower this month mostly due to changes in India and Pakistan, while the stocks-to-use ratio stands at 22.7 percent.
Wheat exports by Australia are forecast at 15.5 million tons, 1 million tons above last months estimate based on aggressive export sales pace to date.
Canadian wheat exports are projected 500,000 tons lower (14 million tons) due to slow export shipments to date, while wheat exports by Kazakstan are forecast at 1 million tons, a reduction of 800,000 tons.
1998/99 wheat exports by Poland are forecast at 500,000 tons, 250,000 tons lower than last months estimate due to the governments decision to reject all export bids in their recent export tender. Because of high internal prices, the government may opt to sell the wheat onto the domestic market.
The 1998/99 wheat export forecast for China is expected to be 750,000 tons, 250,000 tons below last month based on smaller flour exports to North Korea.
1998/99 wheat imports by Indonesia are forecast 300,000 tons higher this month to 2.5 million tons because of commercial purchases by private flour mills.
North Korean wheat imports in 1998/99 are expected to be 550,000 tons, 250,000 tons below last months estimate based on smaller flour imports from China, while wheat import forecast for the Philippines is reduced 200,000 tons, to 1.8 million tons due to lower import purchases to date.
The 1998/99 wheat import forecast for Poland is cut in half this month to 150,000 tons due to the recent hike in the import duty for non durum wheat. The duty was raised from 20 to 70 percent in an attempt to protect domestic farmers. The 1999 temporary import duty for durum is unchanged at 1.5 percent for the European Union, 3 percent for countries outside the Central European Free Trade Agreement (CEFTA). Imports of durum wheat from CEFTA countries are exempt from the duty.
Wheat imports by Colombia, Malaysia, and Zimbabwe in 1998/99 are lowered 100,000 each this month due to smaller-than-expected import purchases to date.
Indias wheat stocks in 1998/99 are raised by more than 2 million tons this month because of large government stocks and slower-than-expected offtake through the Public Distribution System. February 1 government stocks are over 5 million tons above last years level (See below).
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