September 15, 2003

European 2003/2004 Wheat Exports Seen Falling

Exportable 2003/04 supplies in Europe (EU, Eastern Europe, Russia, and Ukraine) plummeted as a harsh winter and summer drought reduced wheat production by more than a quarter, the U.S. Department of Agriculture said Friday in its "Grain: World Markets and Trade" report.

This dearth of European wheat is tightening global supplies and contributing to a drop in world ending stocks to a 22-year low. HRW FOB Gulf prices have climbed $25/ton in the past two months.

European exports are forecast to fall nearly 65% (25 million tons) from last year. Ukraine and Eastern Europe are forecast to become net importers, purchasing most of their wheat from the EU and Russia. This will leave even less European wheat available for export to other markets. Argentina, Australia, Canada and the United States will benefit from this situation as they regain markets lost last year.