SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

World wheat trade in 2002/03 is forecast to be 103.9 million tons, down 3.6 million tons from 2001/02.  Global production is forecast up 1.1 million tons and consumption up 6.7 million tons from the previous year.  Global stocks are forecast to fall by 13.6 million tons to the lowest level since 1997/98.

In early June, export quotes for #2 HRW FOB Gulf averaged $143/MT, up $13 from last month.  Global production is down 9.1 million tons from last month with lower crops in Argentina, United States, China, India, Canada, Eastern Europe, and Ukraine only minimally offset by a larger expected crop in the EU. Global consumption is forecast down 2.1 million tons, while ending stocks are forecast down 9.0 million tons from last month.  Global wheat trade in 2002/03 is forecast down 1.4 million tons largely because of reduced imports in China and the EU.  Smaller exports by Argentina and Canada are only partially offset by more exports from the EU and Kazakstan. 

Within Argentina, internal prices are skyrocketing as farmers hold back supplies due to uncertainty created by the current economic crises.  Therefore, Brazil, which normally takes 96 percent of its wheat imports from Argentina, is looking elsewhere for supplies until the Argentine harvest in December.  Consequently, an opportunity is arising for the United States, Canada, and many nontraditional suppliers.   In fact, the United States has recently sold nearly 300,000 tons to Brazil, and Poland is reported to have sold smaller amounts. 

2002/2003 Trade Changes

Selected Exporters

• Argentina down 2.5 million tons to 9.0 million due to lower expected production resulting from reduced planted area.

• Canada down 500,000 tons to 15 million based on a smaller expected crop.

• EU exports up 1 million to 13.5 million due to lower expected export competition.

• Kazakstan up 500,000 tons to 4.5 million based on infrastructure improvements and less expected competition from Argentina in the Iranian market.

Selected Importers

• China down 1 million tons to 2 million based on high global prices and low domestic prices, which suggest sufficient domestic supplies.

• Egypt up 500,000 tons to 6.0 million due to large supplies of cheap wheat from the Black Sea region.

• EU down 500,000 tons to 3.5 million because of a record crop and rising global prices.

• Morocco down 200,000 tons to 2.8 million based on a larger expected crop.

2001/2002 Trade Changes 

Selected Exporters

• Australia down 1 million tons to 16.5 million based on the slow shipment pace late in the marketing year.

• Kazakstan up 500,000 tons to 4 million tons as a result of increased shipments to Iran that will exceed 1 million tons, thus surpassing the ambitious early season estimate by many officials in Kazakstan.

• Russia up 500,000 tons to 3.5 million due to very strong exports in recent months.  In May, shipments reached a high for the year with Egypt and the EU as major destinations..

Selected Importers

• China down 200,000 tons to 1.3 million due to the slow pace of imports.

• Egypt up 700,000 tons based on late-season purchases from nontraditional suppliers.

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Last modified: Thursday, November 13, 2003