WHEAT: WORLD MARKETS AND TRADE
U.S. Exports Up; HRW Exports Strong: Exports of most U.S. wheat classes (Hard Red Spring, Soft Red Winter, White) are expected to drop this year, in large part due to smaller Chinese purchases. Hard Red Winter sales, however, are very robust and exports are forecast up one million tons year to year, primarily on increased buying in two key markets, Nigeria and Iraq (which so far this marketing year account for 46 percent of total HRW commitments). Total imports in both of these countries have climbed, nearly doubling in the past 2 years. In Nigeria, milling capacity has expanded and domestic consumption has surged as prices of other foodstuffs have risen faster than flour (see article). In Iraq, imports have jumped with larger government purchases and the modest beginnings of stock rebuilding. Also, with the reopening of commercial sales, the United States has recently gained market share on the historically dominant supplier, Australia (See PDF version for chart).
EU Wheat Licenses Lag Last Year’s Level Despite Subsidies: EU common wheat and durum export licenses as of October 6 are nearly 20 percent (0.7 million tons) behind last year’s pace, even with subsidies ranging from 4 to 8 euros per ton. At this point last season there were no subsidies available for export licenses. One of the major reasons for lagging sales is very strong competition from cheaper Russian wheat (recent prices have been $12 below French), exports of which are expected to reach the second highest level in history. With shipments to the EU capped by quota, an even larger percentage of Russian wheat is being sold into North African and Middle Eastern markets.
Domestic: Prices were up sharply in September, especially for high-quality wheats, on strong domestic milling demand as well as robust foreign purchases, particularly of Hard Red Winter. For the month, HRW prices surged by $19 per ton, HRS was up $20 per ton, with SRW up $12 and SWW up $9 (See PDF version for chart).
TRADE CHANGES IN 2005/2006
TRADE CHANGES IN 2004/2005
Return to Table of Contents
Last modified: Thursday, October 13, 2005