EU Surpasses United States as Top Wheat Exporter

For the first time, the United States is projected to lose its position as the world’s top wheat exporter to the European Union (EU) in 2014/15. U.S. exports are constrained because of tight carry-in supplies, a smaller crop, relatively higher prices, and intensified competition from other exporters. Abundant exportable supplies in the Black Sea region and the EU are expected to pressure global prices.

The EU is projected to have its second consecutive bumper crop with more available for export because corn continues to displace wheat in feed rations. In addition to France and Germany, other EU countries are becoming important exporters. For example, Romania’s shipments to Egypt nearly tripled in just one year. Lithuania has become a meaningful supplier to both Iran and Saudi Arabia. The EU is aggressively competing with Russia and Ukraine in Middle Eastern and NorthAfrican markets.

WHEAT: WORLD MARKETS AND TRADE

OVERVIEW

Global production and trade for 2014/15 are up slightly. Larger crops in China, the EU, India, and Russia more than offset a decline in the United States. Exports are raised in the EU and Russia, but cut in the United States. Despite tighter supplies, the season average U.S. farm price is down from last month. Large crop prospects in other exporting countries are pressuring U.S. prices. For 2013/14, U.S. exports are also lowered.

PRICES:

Domestic: Wheat prices plunged over the past month. Abundant supplies in the EU and the Black Sea are pressuring prices despite a forecast of tightening U.S. supplies, particularly of Hard Red Winter (HRW). Soft Red Winter (SRW) plummeted $47/ton to $252. Hard Red Winter (HRW) dropped $35/ton to $322. Hard Red Spring (HRS) fell $30/ton to $325 as planting nears completion. Soft White Wheat (SWW) slid $14/ton to $285.

TRADE CHANGES IN 2014/15

Selected Exporters

• EU is boosted 500,000 tons to 28.0 million as a result of a larger crop. A projected abundance of corn again this year will continue to displace wheat in feed rations, freeing up more for export.

• Russia is up 500,000 tons to 19.5 million as a larger crop boosts exportable supplies.

• The United States is lowered 500,000 tons to 25.5 million on tightening supplies and intensified competition.

TRADE CHANGES IN 2013/14

Selected Exporters- based on trade data

• Australia is up 500,000 tons to 18.5 million.

• Russia is raised 300,000 tons to 18.5 million

• Turkey is up 300,000 tons to 4.3 million.

• United States is cut 300,000 tons to 31.2 million.

Selected Importers

• Morocco is raised 300,000 tons to 3.6 million.

• United States is cut 100,000 to 4.8 million.

RICE: WORLD MARKETS AND TRADE

OVERVIEW

The global rice situation for 2014/15 is virtually unchanged from last month. Production and trade are still projected at record levels. U.S. exports are unchanged. Global production, stocks, and consumption are estimated marginally higher for 2013/14 based largely on a production increase in India. U.S. exports are revised down slightly on the pace of shipments.

The United States supplied close to 90 percent of Haiti’s rice imports during the past decade, with sporadic competition from South America and Asia. However, no single competitor shipped as much rice to Haiti as Vietnam did last year. Low-income consumers are price sensitive and Vietnam is capturing this market segment. Nonetheless, U.S. rice continues to be the preferred choice amongst consumers and the United States is expected to remain the dominant supplier, despite a near $200 price disparity with Vietnam.

SELECTED TRADE CHANGE

• United States exports are cut 100,000 tons in 2014 to 3.1 million on the pace of shipments.

COARSE GRAINS: WORLD MARKETS AND TRADE

OVERVIEW

World corn production in 2014/15 is raised because of larger forecast crops in Ukraine, EU, and Russia. Global trade is slightly higher with greater demand from Turkey. U.S. exports and the season average farm price are unchanged. For 2013/14, global trade is higher as stronger demand from EU, Egypt, Turkey, and Colombia more than offsets cuts to Kenya and China. U.S. exports are unchanged and the season average farm price is lowered slightly on expectations of large late-season marketings and declining cash and futures prices.

PRICES

Since the release of the May WASDE report, favorable weather conditions for planting and crop development in the United States caused U.S. quotes to shed over $20/ton, closing at $216/ton on June 6. Argentine quotes dropped a similar amount, but remain below the United States at $208/ton. Brazilian quotes resumed at the end of May and are $3/ton lower than U.S. Meanwhile, Ukrainian prices remain well above other origins as old-crop supplies tighten.

TRADE CHANGES IN 2014/15

Selected Exporters

• Brazilian corn is boosted 500,000 tons to 22.0 million on prospects for a larger harvest and on expectations that a bigger share will ship after October 1. (The estimate for 2013/14 is cut by 500,000 tons to 20.5 million).

• South African corn is raised 200,000 tons to 2.5 million on a larger crop. (Exports in 2013/14 are raised 300,000 tons to 2.3 million).

• Serbian corn is cut 200,000 tons to 2.1 million on a smaller forecast crop.

• EU barley is up 300,000 tons to 5.8 million on a larger crop.

Selected Importer

• Turkish corn is up 500,000 tons to a record 2.0 million on strong feed demand for poultry and because of the smallest barley crop in 40 years. Barley is up 200,000 tons to 500,000, the largest in more than 30 years. (Corn imports in 2013/14 are also raised 500,000 tons to 1.5 million.)

TRADE CHANGES IN 2013/14

Selected Exporters

• Argentine corn is cut by 500,000 tons to 9.5 million on the slow pace of sales and shipments.

• Indian corn is up 500,000 tons to 3.5 million on the strong pace of shipments and improved competitiveness.

• Russian corn is raised 300,000 tons to 3.8 million on the pace of shipments.

• Ukrainian corn is boosted 1.0 million tons to 20.0 million on trade data to date.

Selected Importers

• Chinese corn is cut 500,000 tons to 4.0 million due to continuing cancellations of U.S. sales.

• Colombian corn is boosted 400,000 tons to a record 4.5 million based on strong imports, particularly from the United States.

• Egyptian corn is raised 500,000 tons to 7.0 million due to the brisk pace of imports.

• EU corn is up 1.0 million tons to 14.0 million based on licenses.

• Kenyan corn is slashed 600,000 tons to 200,000 on a sluggish pace and despite reports of tight supplies and high prices