WORLD MARKETS AND TRADE:

COMMENTARY AND CURRENT DATA

WHEAT: WORLD MARKETS AND TRADE

U.S. Spring Wheat Area Expected to Fall to a 20-Year Low: Total U.S. spring wheat planted area is forecast to continue to shrink in 2007 because wheat area in the Northern Plains is expected to shift into corn as a result of high prices and strong demand for ethanol use. Non-durum spring wheat area is forecast to fall 7 percent, while durum area is expected to rise 6 percent from last year’s very low level. Smaller than expected spring wheat area will be more than offset by a boost in winter area as a result of high prices at planting last fall. Consequently, total U.S. production is expected to be larger next year, which could allow for stronger exports.

Domestic: For March, most class prices fell on lower corn prices as well as expectations of a bigger new crop due to larger planted area and continued favorable growing conditions. White prices have sky-rocketed due to strong demand in Asia, which is the result of slack competition from Australia. For the month, Hard Red Winter (HRW) fell $15 per MT, Hard Red Spring (HRS) fell $5, Soft Red Winter (SRW) fell $16, and Soft White (SWW) climbed $18.

• Russia is up 500,000 tons to 10.5 million on continued larger than expected exports to Mediterranean and South Asian markets.

• Syria is up 900,000 tons to 1.5 million on strong exports, reflecting government decisions to sell stocks. Shipments were strong, particularly to Jordan and North African countries such as Algeria, Egypt and Tunisia.

• Kazakhstan is up 500,000 tons to 5.5 million on a very robust export pace.

• Canada is down 1.0 million tons to 19.5 million due to slower export shipments.

• EU-25 is down 1.0 million tons to 13.0 million on reduced export sales and shipments. Licenses (wheat and flour) are 3.1 million tons (26 percent) behind last year’s pace to date.

• India is up 300,000 tons to 6.3 million on 800,000 tons of private imports, which originated mostly from Australia, Ukraine, and Russia. This supplements the 5.5 million tons bought through five public tenders issued by the State Trading Corporation of India.

• Indonesia is up 300,000 tons to 5.1 million on stronger imports.

• Morocco is down 400,000 tons to 1.5 million on a slow import pace in light of a record crop.

• Libya is down 300,000 tons to 1.0 million on decelerated buying patterns of flour from the EU.

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Last modified: Tuesday, April 10, 2007