WORLD MARKETS AND TRADE:

COMMENTARY AND CURRENT DATA

WHEAT: WORLD MARKETS AND TRADE

MONTHLY HIGHLIGHTS: See PDF version for charts

Brazil Expected To Be Largest Importer in 2006/07: Brazil is expected to surpass Egypt and the European Union this year and return as the world’s largest import market for the first time since 2000/01. Production has fallen to only half of last year’s level as the crop has been severely hit by a combination of drought and frosts at the end of August and beginning of September. This crop shortfall will lead to higher import demand, and could result in greater wheat needing to be sourced from countries outside South America. Last year 91 percent of Brazilian imports were sourced from Argentina, and 7 percent from Paraguay.

PRICES:

Domestic: For October, wheat prices climbed for all classes, and continued to set 10-year highs. The main catalyst for higher prices has been severe drought in Australia, which has slashed production by more than half and is exacerbating already tight global exportable supplies. For the month, Soft Red Winter (SRW) prices rose $22 per ton, Soft White (SWW) prices rose $17, Hard Red Winter (HRW) rose $12, and Hard Red Spring (HRS) prices rose $8.

• Australia is down 1.0 million tons to 12.0 million as the drought-ravaged crop continues to shrink. Additionally, poor pasture conditions are expected to result in greater wheat feeding, further reducing supplies available for export.

• Russia is up 1.0 million tons to 8.5 million as production is raised and export prices remain very attractive.

• Ukraine is down 500,000 tons to 3.5 million as government export policies have reduced shipments.

• China is up 500,000 tons to 2.5 million on strong sales of feed-quality wheat to Asian markets.

• Romania is up 150,000 tons to 400,000 as the crop estimate is raised and greater exports are expected to the EU.

• Brazil is up 300,000 tons to 7.3 million on sharply lower production.

• Iraq is down 500,000 tons to 3.5 million on slow purchases to date.

• Nigeria is down 300,000 tons to 3.6 million. The combination of high wheat prices and lower prices of other local staples (due to bumper harvests) are curtailing wheat consumption growth this year.

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Last modified: Sunday, March 17, 2013