August 17, 2023

 

Rise in exports of US soft red winter wheat to Latin American nations in 2022/23

 

 

 

In the marketing year (MY) of 2022/23, South American wheat imports were 1.6 million tonnes, up 29% from MY2021/22, while US wheat exports decreased by 2% from the prior year and were 17% below the five-year average.

 

On a country level, significant sales increases were observed in Chile, Ecuador and Brazil, among others.

 

Despite high prices, customers in Latin America and the Caribbean continued seeing the value in US wheat classes, particularly soft red winter wheat (SRW). SRW sales were up 28% from the year prior and 31% above the five-year average regionwide.

 

SRW exports increased in several Latin American countries in MY2022/23. Sales were up 361% in Ecuador, 128% in the Dominican Republic, 99% in Honduras, 50% in Nicaragua and 130% in Venezuela.

 

Moving into MY 2023/24, SRW remains an excellent value. The latest US Wheat Associates (USW) Price Report put US SRW at US$249/MT FOB, competitively priced with other origins. Despite the recent volatility in wheat markets, SRW prices remain at their lowest level since the summer of 2021, and wheat futures have just breached the US$6.00/bu threshold.

 

SRW prices have hovered at their lowest level since July 2021. Harvest pressure and the above-average production weighs on the export basis and CBOT futures.

 

Sales of SRW are tracking above last year's pace. The most recent commercial sales put SRW commitments at 1.6 million tonnes, and the majority of this increase can be attributed to purchases from Latin American and Caribbean customers. In South America, SRW purchases are up 37%, while total US wheat sales are down 34% in the region.

 

The August World Agricultural Supply and Demand Estimates put SRW exports at 3.7 million tonnes, up 26% from the year prior and up 37% from the five-year average.

 

SRW has become competitive with other world suppliers. As of August 15, SRW was near parity with 12.5% (dry matter basis) Russian wheat.

 

As seen in commercial sales to several Latin American customers, SRW demonstrates an excellent value as a high-quality and competitively priced soft wheat.

- US Wheat Associates