WORLD MARKETS AND TRADE:

COMMENTARY AND CURRENT DATA

WHEAT: WORLD MARKETS AND TRADE

U.S. Higher Protein Wheat Exports to Surge on Slack Competition: Smaller exportable supplies of higher protein wheat from some major suppliers are providing opportunities for stronger U.S Hard Red Winter (HRW) and Hard Red Spring (HRS) export sales. With larger expected harvests, HRW and HRS exportable supplies will expand 55 percent and 12 percent from last year. With a shortfall in foreign exportable supplies of higher protein wheat, buyers in Africa, Latin America, and around the Mediterranean will need to find alternate sources, and likely will shift purchases to the United States.

Domestic: For June, wheat prices for all classes surged on adverse weather, as well as less than optimistic reports on EU-27, Ukraine, and Russia crop conditions and reduced area for Canada. For the month, Hard Red Winter (HRW) rose $39 per ton, Hard Red Spring (HRS) rose $27, Soft Red Winter (SRW) rose $24, and Soft White (SWW) rose $10.

• Australia is up 500,000 tons to 14.0 million on a higher production forecast.

• Canada is down 1.5 million tons to 15.0 million as a lower production estimate reduces exportable supplies.

• Kazakhstan is up 1.0 million tons to 6.5 million as the harvest is expected to be larger than previously anticipated.

• Ukraine is down 1.0 million tons to 1.5 million as the production estimate is slashed.

• United States is up 1.5 million tons to 28.5 million due to weak competition from other major suppliers.

• Argentina is up 1.0 million tons to 12.0 million with strong late-season shipments.

• Turkey is up 750,000 tons to 1.4 million with strong late-season imports.

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Last modified: Thursday, July 12, 2007