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| United States Department of Agriculture |
| Foreign Agricultural Service |
Circular Series
FG 0908 |
| September 2008 |
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Grain:
World Markets and Trade
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WHEAT: WORLD MARKETS AND TRADE
Abundant exportable
supplies of lower-quality wheat, particularly in
the EU, Ukraine, and Russia, are pressuring
prices, leading to a projected 31 percent growth
in the global use of wheat in feed rations. The
EU is the world’s largest wheat-based feed
economy and with a sharply higher wheat crop,
its expected use of feed-quality wheat in animal
feed rations is estimated to jump 25 percent (up
13 MMT) this year, replacing imported corn and
sorghum. In addition to meeting domestic needs,
the EU’s exportable surplus is expected to be
substiantially higher than in recent years.
Russia and Ukraine also have larger crop
prospects, and are expected to consume more
feed-quality wheat while expanding exports.
Import demand for feed-quality wheat is
expected to climb as well. Countries that have
the flexibility to change their feed rations
will likely shift to include more feed-quality
wheat. Korea and Israel, for example, are
expected to raise their demand for feed-quality
wheat and reduce their imports of higher-priced
corn.
PRICES:
Domestic:
During the month of August,
prices for Hard Red Spring (HRS) fell $34 to
$364/ton, Soft Red Winter (SRW) prices dropped
$15 to $236/ton, but Hard Red Winter (HRW)
increased $4 to $337/ton, and Soft White (SWW)
increased $6 to $328/ton.
TRADE CHANGES IN
2008/2009
Selected Exporters
- EU exports
are up 2.5 million tons to 18.0 million due
to larger exportable supplies.
- Ukraine
and Russia
are both raised 500,000 tons to records of
9.0 and 14.0 million, respectively, based on
larger crop prospects and increased world
import demand for feed quality wheat.
- Canada
is up 500,000 tons to 17.5 million as the
larger crop increases exportable supplies.
- Argentina
is down 1.0 million tons to 7.5 million due
to lower crop prospects.
- Australia
is reduced 1.0 million tons to 14.0 million
due to reduced crop prospects.
- Kazakhstan
is reduced 600,000 tons to 5.4 million due
to a smaller crop.
Selected Importers
- South Korea
and Philippines
are both up 500,000 tons to 4.6 and 2.8
million, respectively, based on stronger
expected demand for wheat to replace corn in
feed rations.
- Israel
is up 400,000 tons to 1.9 million as
expected demand for wheat to replace corn in
feed rations.
TRADE CHANGES IN
2007/2008
Selected Exporters
- EU
is up 1.0 million tons to 12 million due to
larger-than-expected late-season shipments.
- Kazakhstan
is lowered 1.5 million tons to 7.0 million
based on lower shipments primarily due to
its export ban.
- Syria
is reduced 300,000 tons to 500,000 due to
drought-related supply concerns.
Selected Importers
- Algeria
is up 300,000 tons to 5.5 million on
larger-than-expected late-season shipments.
- EU
is up 500,000 tons to 7.0 million on
higher-than-expected late-season imports.
- Russia
is slashed 560,000 tons to 440,000 on
reduced import needs.
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