SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

For the seventh consecutive year, world wheat trade is projected at around 100 million tons. United States exports in 1999/2000 are expected to be up slightly, but will continue to face strong competition from Canada, Argentina, and Australia due to near record crops. Global production is down, owing to smaller crops in several key importing countries, as well as the United States, and the European Union. For the first time in nearly a decade, global consumption is forecast slightly lower, as the growth in food use is offset by a decline in wheat used for feeding. With global consumption exceeding production for the second year in a row, ending stocks will be drawn down. However, stocks in the major exporting countries will remain large, limiting price increases.

Over the past month, U.S. wheat prices have been supported by rain in the northern plains which has delayed spring wheat harvest. In early September, export quotes for #2 HRW FOB Gulf rose to about $120 per ton for nearby shipment compared to $117 last month. World wheat trade is up slightly this month as higher projected imports by Algeria and India more than offset declines in Pakistan and Yemen.

1999/2000 Trade Changes

Selected Exporters

• Argentina’s exports are up 500,000 tons to 9 million due to a larger crop (more planted area).

• Canada up 1 million tons to 17.5 million based on higher production prospects. A larger spring wheat crop more than offsets a decline in durum.

• United States down 500,000 tons to 31 million because of increased competition from Canada and Argentina.

Selected Importers

• Algeria up 500,000 tons to 4.5 million due to lower production.

• India up 500,000 tons to 1 million due to the recent surge in import purchases by private mills.

• Pakistan down 500,000 tons to 3 million due to expectations that the Government will draw down stocks to meet growing consumption needs in order to conserve scarce foreign exchange.

• Yemen down 400,000 tons to 2 million in anticipation of lower domestic demand following the elimination of the consumer subsidy.

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Last modified: Thursday, November 13, 2003