WHEAT: WORLD MARKETS AND TRADE
MONTHLY HIGHLIGHTS: See PDF version for charts
U.S. Imports From Canada Continue to Climb: U.S. imports this month were
revised up to the highest level in 13 years. Canada has a large, better quality
crop this year and imports into the U.S. are allowed to come in duty free. In
recent months, Hard Red Spring and Durum wheats have primarily been imported.
The United States is forecast to be a net importer of durum and products this
year as production has fallen to a nearly 20-year low. Spring wheat supplies are
also tight, with production down as a result of dryness in the Plains states.
U.S. Winter Wheat Area Jumps: The total U.S. winter wheat seeding area is expected to rise 9 percent from the previous year because of elevated prices (10-year highs). Hard Red Winter (HRW) and Soft Red Winter (SRW) are expected to rise 9 and 13 percent respectively from last year. SRW particulary had ideal planting conditions.
Australian Government Grants Two Wheat Export Permits: Agriculture Minister Peter McGauran announced on December 22, 2006 that he granted 2 permits for the export of 300,000 MT of wheat to Iraq by Wheat Australia and 500,000 MT to Indonesia by Cooperative Bulk Handling (CBH) Group, a grower owned and operated cooperative. The government stated that it chose these two because: 1) CBH Group will offer a price premium to Western Australian farmers and 2) Wheat Australia keeps the Iraqi market open for Australian wheat since Iraq will not import wheat from the Australian Wheat Board (AWB) due to its involvement in the UN Oil-for-Food scandal. Currently, supporters of the single-desk believe it was unfair to authorize these export permits because it effectively dismantles the single-desk even before consultations begin between the government and industry over marketing options. Others argue that the decision merely perpetuates the single-desk. The Australian government expects a solution to the single-desk dilemma in May 2007.
Domestic: For December, wheat prices for all classes dropped during the month on very sluggish export sales and shipments as well as expectations for much larger global production in 2007. For the month, Soft Red Winter (SRW) prices fell $25, Hard Red Winter (HRW) fell $23, Hard Red Spring (HRS) fell $17, and Soft White (SWW) prices fell $4.
TRADE CHANGES IN 2006/2007
• Argentina is up 500,000 tons to 10.0 million on very strong old crop exports.
• EU-25 is down 500,000 ton to 15.5 million on tight supplies and sluggish exports licenses which are 1.5 million tons (20%) behind last year’s pace to date.
• Russia is up 1.0 million tons to 9.5 million on higher production and very strong pace of exports to date.
• Ukraine is down 700,000 tons to 2.8 million on the imposition of government export quotas.
• United States is down 1.0 million tons to 24.5 million as high prices have resulted in laggard export sales and shipments to date.
• Iraq is down 500,000 tons to 3.0 million on sluggish buying patterns.
• Pakistan is down 400,000 tons to 200,000 becoming a net exporter as a result of sizeable domestic supplies.
• United States is up 300,000 tons to 3.1 million tons as a result of very large shipments from Canada.
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Last modified: Friday, January 12, 2007