November 17, 2009

US may be forced to lower grain export forecast

The US will be forced to make further cuts to its grain export projections as there was no indication of a rebound in a weak pace of wheat shipments.

The US may not be able to export the 12.1 million bushels of wheat per week needed to reach the official forecasts for 2009-10, especially now that Australia is on for a bumper harvest.

This was due to US wheat being overpriced, as it was offered at 22-percent above Russian bids and 13-percent above European offers last week.

US corn will fall short of the projection too due to strong competition from alternatives for livestock feed.

The USDA had expected its wheat inventory to empty out quickly due to the decline in the dollar, yet there is no indication that wheat exports are picking up. Wheat exports were 4.1 million tonnes by the end of October, down 19 percent on-year.

US corn exports also fell 36 percent on-year in October, due to increased competition from Ukraine, Russia and the EU.

Delays to the US corn harvest and quality fears that surfaced last week in a market scare over toxic fungal residues had also dented shipments.