SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 2001/02 is forecast to be 107.5 million tons, up 4.2 million tons from 2000/01. Global production is forecast down 4.2 million tons and is expected to remain below consumption for the third consecutive year. Global stocks are forecast down 11.9 million tons from last year to the lowest level since 1996/97.

In early December, export quotes for #2 HRW FOB Gulf averaged $125/MT, down $3 from last month. Global production is nearly unchanged from last month with a smaller crop in Argentina and slightly lower production in the EU and former Soviet Union mostly offset by a larger Australian crop. Global consumption is forecast up more than 1.6 million tons while ending stocks are forecast down 1.1 million tons. Global wheat trade in 2001/02 is forecast nearly identical to last month. Larger exports from Australia and the Ukraine are countered by smaller Argentine and EU exports. Expected imports are slightly lower in a few countries while imports by the EU are forecast up 1 million tons.

2001/2002 Trade Changes

Selected Exporters

• Argentina down 1 million tons to 11.0 million based on lower than expected yields in southern producing areas resulting in a smaller crop.

• Australia up 1 million tons to 18.5 million due to a larger than expected crop and less competition.

• EU down 500,000 tons to 11.5 million based on the slow pace of export licenses, as the Commission continues to refuse bids by traders for subsidies needed to compete with cheaper supplies out of the Black Sea.

• Ukraine exports up 500,000 tons to 4.5 million due to the strong pace of shipments to date, especially to the EU.

Selected Importers

• EU up 1 million tons based on the high level of duty-free import licences and continued high domestic prices, both of which favor relatively cheap imports.

• Indonesia down 200,000 tons to 4.0 million because of reduced credit availability.

• Turkey down 200,000 tons to 1 million due to lower than expected purchases to date.

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Last modified: Thursday, November 13, 2003