August 24, 2006

USDA forecasts 24 percent increase in US soft wheat exports
 

Reduced competition from wheat-exporting countries would lead to a 24 percent increase in US soft wheat classes, according to a recent report by the USDA.

Sharply reduced supplies from regions such as the EU and the Black Sea have tightened supplies, according to The World Agricultural Supply and Demand Estimates report by USDA

Even as soft wheat exports increase, total US exports are expected to fall by 3.0 million tonnes because drought has reduced supplies of hard red winter wheat and hard red spring wheat, according to US Wheat Associates market analyst Joe Sowers

The heatwave in Europe has reduced EU production to 119 million tonnes, down 3.4 million tonnes from 2005/06 while extreme winter weather has reduced supplies from Russia, Ukraine and Kazakhstan.

On top of that, major exporters in the southern hemisphere are also experiencing poor crop weather. USDA forecasts a 12 percent production decline in Australia as dry conditions have decreased planted acreage.

Conditions in Argentina are also unfavorably dry and are thus likely to affect production. However there are still several months before the harvest for these regions and a turnaround may be possible.

India, with 4.5 million tonnes imported since the beginning of the year, has become the eighth largest importer in the world.

Egypt is expected to remain the world's largest at 7.2 million tonnes. In 2005/06 the EU-25 and Russia accounted for more than half of Egyptian imports. With reduced  supplies from the region, alternative sources may take their place.

Brazil, the third largest importer in the world, is expected to increase purchases in anticipation of a smaller domestic harvest.

With production in Argentina, which accounts for nearly 90 percent of Brazilian imports, lowered by unfavourable weather, other exporters are expected to gain more access to these markets.