World wheat trade and U.S exports boosted further

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

According to the USDA's Wheat Outlook report, world wheat trade is increased 1.3 million tons this month to 143.1 million tons, breaking the historical record of 2008/2009. As was described above, strong demand for meat products and therefore for grains, fueled by higher incomes in a number of countries, has been increasingly satisfied this year by abundantly available feed-quality wheat that remains competitively priced vis-à-vis corn and other coarse grains.

Being in the last quarter of the July-June trade year, most of the trade revisions this month are based on the pace of sales and shipments. Wheat exports are increased this month for Argentina, Brazil, and Pakistan, up 0.5 million tons to 10.2, 2.0, and 0.8 million tons, respectively. In Argentina, the evidence of a strong pace of wheat export licenses coupled with recent strong sales to Algeria and Morocco, and the assessment of wheat domestic consumption based on the local mill-grind data, support an increase in 2011/2012 projected wheat exports.

Brazil has been demonstrating stronger-than-expected pace of exports, selling non-trivial amounts of wheat to such non-traditional destinations as Saudi Arabia, Iran, South Africa, EU, and many others. The Brazilian Government continues to subsidize exports of low-protein wheat that can be either used for feed or to make flat bread in North Africa and Middle East.

In Pakistan, after the wheat export ban was lifted in December 2010, the country’s wheat exports took off. The country has been actively exporting through the first half of 2011/12 trade year before wheat prices in the region declined, making Pakistani wheat less competitive. Exports are also up 0.4 and 0.3 million tons, respectively, for Uzbekistan and Canada, reflecting the pace of shipments.

Wheat exports are down this month for Ukraine and Uruguay by 1.0 and 0.2 million tons, respectively, both based on pace of sales. Despite ample wheat stocks (63 percent higher on the year), and with no clear official wheat exports restrictions, Ukraine continues to lag substantially behind in wheat sales. Since the beginning of the local marketing year in July 2011 through early April 2012, Ukraine has exported just under 4.0 million tons of wheat. As suggested in February, the Government may be using bureaucratic measures to ensure ample domestic wheat supplies in case of a harvest shortfall in 2012/2013.

The largest increase this month in 2011/12 wheat imports is for China, up 0.5 million tons to 2.0 million. The country continues to import large quantities of feed-quality wheat from Australia for use inSouth China provinces, as it seems to be cheaper than moving wheat from wheatproducing areas farther north.

Evidence of rising shipments supports an increase in projected imports for the following countries: Mexico up by 0.3 million tons to 4.5 million, as it continues to replace low corn and sorghum supplies with imported wheat; Kenya, Morocco, Philippines, and Vietnam up by 0.2 million tons each; while Angola and Israel are up 0.1 million tons each. A lower pace of imports resulted in reduced imports for Turkey, down 0.3 million tons, and for Libya, down 0.2 million tons.

U.S. 2011/12 July-June trade year wheat exports are forecast up 0.3 million tons this month to 26.8 million. The forecast for the June-May local marketing year is unchanged at 1,000 million bushels. This means that an additional 0.3 million tons of wheat is expected to be exported in June 2012 after the start of the local 2012/13 marketing year.

The latest sales to Egypt, EU-27, and Mexico support this projection, as at least part of the recently sold wheat is likely to be delivered in June. The pace of sales and shipments supports an increase that puts exports 9.2 million tons lower than a year earlier, when exports reached 36.0 million tons. U.S. Census estimates of wheat exports for July 2011 through February 2012 reached 17.1 million tons, 4.6 million lower compared with the same period a year earlier.

Grain inspections for March indicate exports of 2.5 million tons, down 0.94 million tons on the year. As of March 29, 2012, outstanding export sales were 4.5 million tons, 3.2 million tons lower than a year ago. These sources combined indicate an 8.7-million-ton drop on the year in export commitments.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


5E Series

Introduced in 2013, the new 85 and 100 hp John Deere 5085E and 5100E feature 4-cylinder Interim Tier 4 emissions-compliant ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight