Wheat. World Markets and Trade. February 2016 – USDA Feb. 10, 2016
Global production in 2015/16 is up slightly to a new record. The biggest change is a larger projected crop in Argentina. Global trade is up inappreciably. Canada's and Turkey's exports are raised and the United States is lowered. The season-average farm price is unchanged this month.
Canadian Wheat Exports Projected To Surpass U.S. Again
For the second year in a row, Canada is expected to surpass the United States in wheat exports. This trend is underpinned by favorable exchange rates for Canadian exports. A strong U.S. dollar is hampering the United States' ability to compete in traditional markets, much less in a global market awash in lowerpriced wheat. The U.S. dollar has appreciated 32 percent against the Canadian dollar since the start of the 2013/14 trade year. As Canadian wheat exports maintain their competitive advantage against U.S. wheat, its ending stocks are projected at an 8-year low. U.S. stocks, on the other hand, are expected to rise to a burdensome 6-year high.
Prices for U.S. wheat classes were nearly unchanged in January. Hard Red Winter (HRW) edged up $1 to $213/ton, Hard Red Spring (HRS) rose $3 to $230/ton, and Soft Red Winter (SRW) notched a $4 gain to $202/ton. Soft White Wheat (SWW) slid $2 to $206/ton. U.S. wheat continues to be uncompetitive in most global markets.
TRADE CHANGES IN 2015/16
- Canada is boosted 1.0 million tons to 22.0 million on the strong shipment pace to date.
- Turkey is raised 500,000 tons to 4.5 million as flour and pasta product exports expand into new markets in sub-Saharan Africa.
- United States is cut 500,000 tons to 21.5 million on sluggish sales and shipments to date.
- China is up 300,000 tons to 2.3 million due to a stronger-than-expected pace.
- Ethiopia is raised another 500,000 tons this month to 2.4 million as lower-priced wheat is substituting for other coarse grains in food consumption.
- Iran is down 500,000 tons to 4.0 million as the government attempts to lower excess supplies by prohibiting government wheat imports after March 20, 2016.
- South Korea is boosted 300,000 tons to 4.5 million based on a recent uptick in feedquality wheat purchases.