Ukraine Ports Receiving Higher Traffic: More early-season Kazakh and Russian exports have been shipped through Ukraine Black Sea terminals than last year because of strong demand in North Africa and the Middle East. These ports can handle the surge since Ukraine has not been shipping any of its own wheat since July due to a highly restrictive export quota that is expected to last until spring of 2008. However, policy decisions by Russia and Ukraine may affect whether the ports reach overcapacity. If the Russian government decides to raise its wheat export tax to 30 percent in January, this could cut off its exports but would free up Ukraine port capacity. This would accommodate Ukraine’s shipments if it lifts its export restrictions early. Also, an increase in the Russian export tax would facilitate the shipment of larger quantities of Kazakh wheat. If all three countries export significant quantities during the second half of the 2007/08 campaign, Ukraine port facilities could become severely stretched, leading to congestion and adding to rail system capacity problems.

Domestic: For November, wheat prices for all classes rose on large purchases by Pakistan, foreign sales to India, as well as reports of frost damage and the temporary closure of the export registry in Argentina. For the month, Hard Red Winter (HRW) rose $33 per ton, Hard Red Spring (HRS) rose $43, Soft Red Winter (SRW) rose $33, and Soft White (SWW) rose $64.

• Canada is up 500,000 tons to 14.5 million due to strong early season exports.

• EU-27 is down 500,000 tons to 9.0 million because of high internal prices and a sluggish export license pace, a 9-year low.

• United States is up 1.0 million tons to 32.5 million, the highest in over a decade, because of robust import demand.

• Bangladesh is up 200,000 tons to 1.8 million due to a cyclone which damaged its rice crop, thereby, necessitating further wheat imports.

• Egypt is up 200,000 tons to 7.0 million because of a strong import pace.