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 despite wide price fluctuations. U.S. exports are facing intensifying 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 up for the fifth year in a row and exceeds production. Consequently, ending stocks will be drawn down, particularly among importers. However, stocks in the major exporting countries will remain large, limiting any price increase.

Over the past month, U.S. wheat prices have stagnated at near-decade lows. In early February, export quotes for #2 HRW FOB Gulf averaged about $110 per ton for nearby shipment, compared to $125 per ton a year ago. World wheat trade is little changed this month as higher Russian and Ukrainian imports offset lower imports by Egypt, Morocco, and South Korea.

1999/2000 Trade Changes

Selected Exporters

• Australia exports up 500,000 tons to 18.5 million due to larger-than-expected production.

• Kazakstan up 500,000 tons to 4.5 million as aggressive shipments continue to Russia and other regional markets.

• United States down 500,000 tons to 28.5 million due to a slowing export pace in the face of stronger competition.

Selected Importers

• Egypt imports down 200,000 tons to 6.5 million because of slower-than-expected purchases.

• Morocco down 300,000 tons to 2.5 million due to sluggish import demand.

• Russia up 1 million tons to 4.5 million because of unusually large imports from Kazakstan during late 1999.

• South Korea down 200,000 tons to 3.5 million due to slowing feed-wheat purchases.

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Last modified: Thursday, November 13, 2003