Middle East wheat imports are up 2 million tons this month to 17 million, and up 6 million tons over last year. Growth is being led by Iran, whose imports are boosted 2 million tons this month. Iran is forecast to import 4.5 million tons, and has already purchased up to 1 million tons of Canadian wheat for fall delivery. Ukraine, Russia, and Kazakhstan are well situated to compete for the remaining demand. The EU-27 is likely to compete only for residual demand.

Middle East demand is being driven by low production due to drought. In addition to large imports by Iran, Syria’s imports are projected to rise from 200,000 tons in 2007/08 to 1 million tons in 2008/09.

Domestic: Since April 2008, price volatility has moderated somewhat, in anticipation of the largest global wheat harvest in history. Wheat prices moved the most for SRW and HRS; both jumped more than 10 percent on the month, but for different reasons. SRW moved from $250/ton to $283/ton largely supported by the rally in corn prices. HRS increased from $496/ton to $550/ton due to strong demand for high protein wheat.

• EU-27 is up 1.0 million tons to 16.0 million based on larger crop prospects and strong regional demand in the Mediterranean.

• Kazakhstan and Ukraine are both raised 500,000 tons to 6.5 million and 7.5 million respectively on expected strong regional demand in North Africa and Middle East.

• Iran is up 2.0 million tons to 4.5 million, the highest level in 8 years as a devastating drought struck the region and will expand import demand.

• South Korea is up 500,000 tons to 1.0 million based on wheat replacing corn in feed rations.

• Canada is up 800,000 tons to 16.8 million as late season shipments have surged.

• EU-27 is up 1.5 million tons to 11.0 million based on export licenses with much of the demand coming from North Africa.

• Mexico is raised 300,000 tons to 850,000 because of expanded durum shipments to the EU-27.

• Ukraine is cut 600,000 tons to 1.1 million as problems with contracts and logistics slowed shipments immediately after the export quota was lifted.

• United States is down 500,000 tons to 34.5 million as late season shipments slowed from their earlier monthly pace.

• North Africa importers, Algeria, Morocco, and Libya are up a combined 1.1 million tons on recent shipment information.