SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 2001/02 is forecast to be 107.3 million tons, up 4.3 million tons from 2000/01. Global production is forecast down as smaller crops in the United States, Canada, EU, China, and South Asia more than offset increases in Eastern Europe, FSU, North Africa, and Argentina. Consumption is expected to remain well above production for the third consecutive year leading global stocks to fall an estimated 25 million tons from last year to their lowest level in 19 years.

Wheat prices have fallen significantly over the past month with harvest pressure. In early July export quotes for #2 HRW FOB Gulf averaged $124/MT, down $10 from last month despite indications of tightening exportable supplies in some key countries. Expected global production fell nearly 1.5 million tons from last month mainly due to smaller expected crops in Australia, Canada, and the EU. Global consumption is expected down 1.2 million tons while ending stocks are forecast up almost 1 million tons. Though U.S. exports are estimated up, world wheat trade in 2001/02 is forecast down slightly from last month.

2001/2002 Trade Changes

Selected Exporters

• Australia down 1 million to 16.5 million based on lower expected production resulting from dryness in key producing regions.

• Canada down 500,000 tons to 18 million due to decreased crop prospects.

• EU down 500,000 tons to 13.5 million on prospects for a smaller French crop and tighter overall EU exportable supplies.

• United States up 1.5 million tons to 29.0 million based on a better-than-expected crop and decreased competition resulting from declining production prospects among competing exporters.

Selected Importers

• Brazil down 200,000 tons to 7.3 million with prospects for a larger crop.

• Pakistan down 500,000 tons to 500,000 due to a better expected crop.

• Uzbekistan up 400,000 tons to 1 million because of prospects for a smaller crop.

2000/2001 Trade Changes

Selected Exporters

• Canada down 500,000 tons to 17.5 million due to a slower export pace.

• Turkey down 200,000 tons to 1.3 million because of lower than expected shipments to date.

• Hungary down 200,000 tons to 1 million due to a lagging export pace.

Selected Importers

• Brazil down 300,000 tons to 7.6 million because of lower than expected purchases of Argentine wheat to date.

• Iraq up 200,000 tons to 3.2 million because of a strong import pace.

• South Korea down 200,000 tons to 3.3 million due to lower purchases of feed quality wheat to date.

• Nigeria up 100,000 tons to 1.6 million due to increased purchases.

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Last modified: Thursday, November 13, 2003