SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 2001/02 is forecast to be 106.7 million tons, up 3.8 million tons from 2000/01. Global production is forecast down 8 million tons and is expected to remain below consumption for the third consecutive year. Global stocks are forecast to fall an estimated 23 million tons from last year to their lowest level in 13 years.

In early October export quotes for #2 HRW FOB Gulf averaged $121/MT, down $6 from last month. Expected global production is largely unchanged from last month as increases in Russia and Ukraine more than offset smaller crops in Argentina, Canada, the EU, and the United States. Global consumption is forecast down slightly while ending stocks are estimated up 2 million tons. World wheat trade in 2001/02 is forecast 500,000 tons lower than last month.

Exports by the EU are forecast to fall to 12 million tons which would be the lowest level in 25 years. Internal EU market prices are well above world market prices because of crop shortfalls and producers holding supplies off the market. Consequently, the Commission has been unwilling to grant export subsidies for fear of further boosting domestic prices. However, without subsidies and with a stronger Euro, EU wheat cannot compete with the cheap supplies from Eastern Europe and the FSU.

2001/2002 Trade Changes

Selected Exporters

• Argentina down 500,000 tons to 12.5 million based on reduced crop prospects.

• Canada down 500,000 tons to 15.5 million due to a smaller crop.

• EU down 500,000 tons to 12.0 million based on a very slow sales pace, intensified competition, and the absence of export subsidies.

• Pakistan up 500,000 tons to1 million due to increased sales prospects as well as shipments to Afghanistan.

• Russia up 500,000 tons to 2 million due to a larger crop.

• Ukraine up 500,000 tons to 4 million based on increased sales prospects.

• United States down 500,000 to 28.5 million based on low sales to date.

Selected Importers

• Afghanistan up 300,000 tons to 1.0 million based on greater humanitarian donations.

• Iran down 500,000 to 6.5 million resulting from a slow buying pace.

2000/2001 Trade Changes

Selected Exporters

• India down 300,000 tons to 2.2 million based on final export figures.

• Kazakhstan up 150,000 tons to 3.65 million based on higher-than-expected exports.

Selected Importers

• China down 200,000 tons to 300,000 tons due to a slow import pace.

• Philippines up 300,000 tons to 3.1 million due to higher-than-expected purchases from the United States and India.

• Iran down 500,000 tons to 6.5 million based on a slow import pace.

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Last modified: Thursday, November 13, 2003