SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD WHEAT SITUATION AND OUTLOOK

1999/2000 Trade Changes

World wheat trade in 1999/2000 is projected at 103.6 million tons. Trade in recent years has been relatively flat although prices have fluctuated between record highs and near-record lows. U.S. exports will face strong competition from Canada, Argentina, and Australia due to near-record harvests. Global production is down, owing to smaller crops in several key importing countries, as well as the United States, and the European Union. Global consumption is forecast slightly lower, but is still forecast to exceed production for the second year in a row. Consequently, ending stocks will be drawn down. However, stocks in the major exporting countries will remain large, limiting any price increase.

Over the past month, U.S. wheat prices have dropped $5 per ton due to the continuation of mundane import demand, strong competition, and improved new crop outlook for winter wheat. In early December, export quotes for #2 HRW FOB Gulf averaged about $108 per ton for nearby shipment, compared to $126 per ton a year ago. World wheat trade is up slightly this month due to higher imports by Bangladesh, Iran, and India as well as more exportable supplies in Argentina, and Canada.

1999/2000 Trade Changes

Selected Exporters

• Argentina exports up 500,000 tons to 10 million based on larger production prospects because of generally favorable weather.

• Canada up 1 million tons to 18.5 million due to larger-than-expected production.

• Kazakstan up 500,000 tons to 3.3 million based on the recent drop in prices which makes this country’s wheat more attractive to Russia and other regional markets even with high transportation costs.

• Romania and Bulgaria up 200,000 and 500,000 tons (to 500,000 and 600,000 ) respectively, because of strong export sales pace to date.

• United States down 500,000 tons to 29 million due to stronger competition.

Selected Importers

• Bangladesh imports up 500,000 tons to 1.5 million due to stronger-than-expected import demand.

• India up 300,000 tons to 1.6 million because of strong early-season imports by private mills in Southern India. All vessels at port with filed bills of entry prior to December 1 will not have to pay the newly imposed 50 percent duty.

• Iran up 500,000 tons to 6.5 million on robust purchases over the past few months.

• Russia up 500,000 tons to 3.0 million based on the recent drop in Kazakstan prices.

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Last modified: Thursday, November 13, 2003