SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 1999/2000 is projected at 101.6 million tons. This is the seventh consecutive year that trade has been around this level although prices have fluctuated between record highs and near-record lows. Slightly higher U.S. exports will face strong competition from Canada, Argentina, and Australia due to bumper harvests. Global production is down, owing to smaller crops in several key importing countries, as well as the United States, and the European Union. Global consumption is forecast largely unchanged, but is still expected to exceed production for the second year in a row. Consequently, ending stocks will be drawn down. However, stocks in the major exporting countries will remain large, limiting any price increase.

Over the past month, U.S. wheat prices have been little changed due to stagnant import demand. In early November, export quotes for #2 HRW FOB Gulf averaged about $113 per ton for nearby shipment, compared to $131 per ton a year ago. World wheat trade is up slightly this month due to higher imports by Brazil and India as well as more exportable supplies in Argentina, Australia, and Kazakhstan.

1999/2000 Trade Changes

Selected Exporters

• Argentine exports up 500,000 tons to 9.5 million based on larger production prospects because of higher area and generally favorable weather.

• Australia up 500,000 tons to 18 million due to higher production prospects.

• Kazakhstan up 500,000 tons to 2.8 million because of a 3.5 million ton larger crop. Much of the bigger crop is reflected in larger ending stocks because of the country’s high costs of moving grain onto a low-priced global market.

• U.S. down 1 million tons to 29.5 million due to strong competition from Australia and Argentina.

Selected Importers

• Brazil imports up 500,000 tons to 7 million due to stronger-than-expected import demand.

• China down 500,000 tons to 1 million because of the extremely slow import pace to date. This would mark the second consecutive year of record low imports.

• Egypt down 500,000 tons to 6.7 million based on sluggish import purchases over the past few months.

• India up 300,000 tons to 1.3 million because of strong early-season imports by private mills in the south.

• Russia up 500,000 tons to 2.5 million based on larger-than-expected exportable supplies in Kazakhstan.

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Last modified: Thursday, November 13, 2003