Wheat Exporter Ending Stocks Surge DespiteRecord Global Consumption

Global wheat consumption is projected at a record in 2014/15. Food use is expanding because of population growth, urbanization, and rising incomes. Growth is particularly strong in Sub-Saharan Africa and Southeast Asia. Feed use is up as well, mainly driven by a huge jump in EU usage. The EU is projected to have a record crop with a large quantity of competitively priced feed-quality wheat.

Even with consumption at a record, exporter ending stocks are up nearly 20 percent from last year. The EU, Russia, and Ukraine account for all of this increase. Bumper crops in all three countries are enabling robust exports, in addition to stock building. The EU is forecast to be the world's largest exporter and prices currently are the most competitive. Russia's exports are projected at a record, while Ukraine's exports are its second highest. Even though these countries are exporting large amounts of wheat, they are still expected to have a surplus, which will continue to pressure prices.

U.S. stocks are forecast slightly higher year-to-year in spite of a smaller crop as high relative prices make exports less competitive. Canada's stocks are projected to decline as this year's crop is down from last year's record. Stocks in Australia and Kazakhstan are nearly unchanged.

OVERVIEW

Global production for 2014/15 is projected at a record with bigger crops this month in both Canada and Kazakhstan. Global trade is up, driven by a boost in Bangladesh, Egypt, Iran, and the United States' imports. Exports are raised in Canada, EU, Iran, Kazakhstan, Turkey and Ukraine, while Russia is lowered. U.S. exports are unchanged. The season-average farm price is raised slightly.

U.S. PRICES:

Export prices for all wheat classes were up in November. Hard Red Spring (HRS) and Hard Red Winter (HRW) prices rose by $2 to $369/ton and $3 to $288/ton, respectively.

Soft White Winter (SWW) jumped $11 to $287/ton as supplies tighten with strong export sales.

Soft Red Winter (SRW) spiked $17 to $271/ton and is the highest since mid-May, over concerns that unprotected winter wheat crops (no snow) would sustain damage from early-season frigid temperatures.

TRADE CHANGES IN 2014/15

Selected Exporters

  • Canada is up 500,000 tons to 23.0 million tons on a larger crop and strong global demand for durum.
  • European Union is boosted 1.0 million tons to 29.0 million on continued large sales.
  • Iran is raised 500,000 tons to 700,000 on reports of larger flour exports to neighboring countries.
  • Kazakhstan is up 500,000 tons to 5.8 million on a larger crop.
  • Russia is cut 500,000 tons to 22.0 million because of reduced competitiveness.
  • Turkey is boosted 600,000 tons to 3.8 million on a strong pace of flour exports, particularly to Syria and Iraq.
  • Ukraine is raised 300,000 tons to 10.3 million on the fast pace of shipments to date.

  • Selected Importers

  • Bangladesh is up 300,000 tons to 3.6 million on the strong pace of shipments.
  • Egypt is raised 500,000 tons to 10.0 million on strong year-to-date purchases by both the private and the public sector.
  • Iran is boosted 1.0 million tons to 6.0 million on continued strong purchases and recent deliveries.
  • The United States is raised 300,000 tons to 4.7 million on larger Canadian supplies and tightness in the U.S. durum market