Wheat Sales Strong Despite Challenges
Combined production by Australia and Canada is forecast down 16 million tons from last year. With Canadian supplies of Western Hard Red Spring (CWRS) particularly tight, exports are estimated to be only half of last year. Consequently, the Canadian Wheat Board has announced that it will curtail sales. U.S. Hard Red Spring sales are expected to benefit, particularly in Latin America, where U.S. sales thus far have been 50 percent above last year. Sales to this region also have benefited from Argentina’s economic problems and reduced production, as U.S. sales to Brazil thus far are nearly 700,000 tons compared to only 200,000 for all of last year.
In Asia, Japan, South Korea, and the Philippines have all bought more U.S. wheat this year.
The strong pace of sales is occurring despite U.S. wheat prices that have risen dramatically over the past several months as a result of lower U.S production and smaller crops in other major exporting countries. The U.S. crop is estimated at 44.2 million tons, which is about 9 million less than last year’s very small crop. At the same time, crops in the EU and FSU are forecast up significantly from last year. With a major price advantage, these suppliers have been gaining market share at the expense of the United States, as evidenced by poor U.S. sales to North Africa. For example, this year U.S. wheat has been nearly shut out of Egypt with sales of only 253,000 tons compared to 1.6 million tons during the same period last year. Cheaper French, Ukrainian, and Russian wheat is capturing most of the market. The large EU supplies have also meant much smaller EU purchases from the United States. While some milling wheat is still making its way into the EU, SRW exports to Italy and Spain, which were significant last year, have not occurred due to uncompetitive U.S. prices this year.
For more information,
contact: Oliver Flake, 202-690-4200
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