WORLD MARKETS AND TRADE:

COMMENTARY AND CURRENT DATA

WHEAT: WORLD MARKETS AND TRADE

MONTHLY HIGHLIGHTS: See PDF version for charts

EU-25 Export Licenses Drag: EU-25 export licenses have dramatically slowed from the previous year. Total wheat export licenses for flour and grain amounted to 7.7 million tons as of March 1, 2007, while last year they totaled 11.4 million. Because low supplies have caused domestic wheat prices to rise, the Commission in recent months has not approved free market export licenses in order to avoid any further price escalation. In addition, the EU has been selling its wheat intervention stocks in order to keep pressure on domestic prices. However, these stocks are virtually depleted. Flour exports have slowed because many traditional importers have constructed their own flour mills and now buy grain instead of flour.

Domestic: For February, all wheat class prices rose, influenced by stronger export sales and shipments and high corn prices. For the month, Hard Red Winter (HRW) rose $7 per MT, Hard Red Spring (HRS) rose $8, Soft Red Winter (SRW) rose $3, and Soft White (SWW) jumped $12.

• EU-25 is down 1.0 million tons to 14.0 million on reduced export sales and shipments. Licenses (wheat and flour) are 3.7 million tons (33 percent) behind last year’s pace to date.

• Sudan is down 200,000 tons to 1.4 million on slow import pace.

• Nigeria is down 100,000 tons to 3.5 million on slow buying patterns.

• United Arab Emirates is down 100,000 tons to 1.0 million on smaller than expected imports during the first half of the year.

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Last modified: Friday, March 09, 2007