SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 1999/2000 is projected at 104.2 million tons. Trade in recent years has been relatively flat although prices have fluctuated between record highs and near-record lows. U.S. exports are facing strong competition from Canada, Argentina, and Australia due to near-record 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 largely unchanged and will 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. In early January, export quotes for #2 HRW FOB Gulf averaged about $108 per ton for nearby shipment, compared to $125 per ton a year ago. World wheat trade is up slightly this month as higher imports by Iran, Indonesia, and Russia more than offset lower import demand by China and South Korea.

1999/2000 Trade Changes

Selected Exporters

• Kazakstan exports up 700,000 tons to 4.0 million due to aggressive shipments to Russia and other regional markets over the past several months.

Selected Importers

• China imports down 300,000 tons to 700,000 (the lowest level on record) due to extremely sluggish import pace to date.

• Indonesia up 300,000 tons to 2.8 million because of strong import pace to date.

• Iran up 500,000 tons to 7.0 million on robust purchases over the past few months.

• South Korea down 500,000 tons to 3.7 million due to smaller than expected purchases of feed quality wheat.

• Russia up 500,000 tons to 3.5 million based on larger-than-expected imports from Kazakstan.

• Ukraine up 200,000 tons to 300,000 due to the recent decision by the government to allow duty-free imports of milling.

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Last modified: Thursday, November 13, 2003