November 29, 2011
Australian, Former Soviet Union wheat exports on the rise
Australia and Former Soviet Union (FSU) countries like Russia, Ukraine, and Kazakhstan are exporting more wheat than was projected last May.
They are doing this by selling wheat below US wheat export prices. US wheat exports are less than projected in May 2011.
Some export competitors, especially FSU countries, will set their wheat price below the US price irrespective of how low the US price goes. US exporters do not appear to want to get into a price war. US wheat producers probably do not want a price war either.
Russia, Ukraine, and Kazakhstan are essentially buying their way into the North African and Middle Eastern wheat export markets. Their strategy is working because major buyers, like Egypt, are buying wheat from the FSU countries rather than from US.
USDA's US wheat export projections for the 2011/12 wheat marketing year have declined from 1.05 billion bushels in the May 2011 WASDE (World Agricultural Supply and Demand Estimates) to 975 million bushels in November.
During this same period, Russia's wheat export projection increased from 395 million bushels to 446 million bushels. This is a 151 million bushel increase.
Kazakhstan's exports are projected to be 235 million bushels, an increase of 168 million bushels. Ukrainian export expectations increased from 107 million bushels to 179 million bushels, a 72 million bushel increase.