Source: U.S. Wheat Associates Demand for U.S. wheat exports in the second half of 2010/11 likely will be double the level reached in the second half of 2007/08.
The U.S. Department of Agriculture (USDA) published its December World Agricultural Supply and Demand Estimates (WASDE) with no change in its forecast for 2010/11 U.S. wheat export sales. At more than 34 MMT (1.3 billion bushels), the forecast is roughly the same as total U.S. wheat sales in 2007/08. Commercial sales to date in 2010/11 equal 70 percent of the current forecast (see chart, below). At the same time in 2007/08, however, U.S. commercial sales stood at 90 percent of USDA's December forecast of about 32 MMT (1.2 billion bushels).
Early in 2007/08, wheat buyers saw that total supplies would diminish to near record levels and were racing to cover their needs from the reliable U.S. wheat market. This year, buyers are concerned about the supply of better quality wheat (see "Wheat Prices Up on Australian Quality Concerns" below). In fact, USDA increased its 2010/11 global wheat production forecast by 3.6 MMT (132 million bushels) to 647 MMT (23 billion bushels), primarily due to an increased projection for Canada, Australia and Pakistan, the report said. However, USDA reduced its export forecast for Canada and Australia to 17 MMT (624 million bushels) and 15 MMT (551 million bushels) respectively, due to the lower quality in their crops this year.
Some buyers can take advantage of abundant supplies of U.S. wheat at somewhat lower protein specifications. This week, for example, Egypt announced a new purchase of 110,000 MT of hard red winter (HRW) while Jordan bought 150,000 MT of HRW.
Read the December WASDE report at http://bit.ly/180fj4. The Nov. 16 issue of Milling & Baking News features a front page article detailing the similarities and differences between wheat supply and demand this year and in 2007/08. Read more at http://bit.ly/hDyii4.
U.S. Wheat Commercial Sales (000 Metric Tons)
June â December
Dec USDA Forecast
YTD % of Total
Source: U.S. Department of Agriculture, Foreign Agricultural Service, Weekly Export Sales Report, www.uswheat.org/reports/prices
Demand for U.S. wheat exports in the second half of 2010/11 likely will be double the level reached in the second half of 2007/08.