WHEAT: WORLD MARKETS AND TRADE
European Union Restarts Export Subsidies: After a nearly 2-year hiatus, the European Commission has resumed export subsidies for wheat. The first awards were for a maximum of 4 euros per ton (about $5), for licenses covering 134,000 tons against an open tender of 2 million tons. These licenses were reportedly needed to cover existing sales, whereas future subsidy bids are likely to be higher to cover new sales against strong competition.
Domestic: Wheat prices have trended downward during the 4 weeks ending February 4. Stronger competition (particularly aggressive Argentine sales), the EU reinstating subsidies for export tenders, and prospects for large global crops all pressured prices. DNS declined only slightly because of strong basis due to logistical problems in the Northern Plains (See PDF version for chart).
For the week ending February 4, compared to a month earlier, average HRW prices were $10 a ton lower, while SRW was $1 a ton lower. HRS prices dropped $5 a ton, while SWW increased $3 a ton.
TRADE CHANGES IN 2004/2005
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