Australia Frontloads Wheat Exports

On the heels of a record crop last year, Australia continues to move old-crop supplies in the first quarter of 2017/18 trade year (July-June). Therefore, Australia wheat exports are forecast to remain comparatively high at 20.0 million tons, despite a smaller production forecast. Even so, Australia is still expected to have ample old-crop supplies when the bulk of its new harvest enters the market around December. The majority of Australia’s exports are destined for Asia, which continues to have strong demand for high-quality wheat.

During the second half of the trade year, some regional demand may be filled by Black Sea supplies, which will be substantially more abundant and competitively priced. For example, as those large crops enter the market, Australia’s dominant share in Indonesia, the second largest global wheat importer, may be threatened. Indonesia prefers Australian wheat, but will purchase Black Sea wheat when there is a large spread in price.


For 2017/18, global production is up this month as larger crops are expected for Canada, the European Union, India, Morocco, Russia, and Turkey. Global trade is forecast nearly unchanged from last month, but remains a record. Imports are forecast down for India and Turkey, but higher for Iraq. Exports are projected up for Argentina and Canada, offsetting a reduction for Australia. U.S. trade is unchanged this month. Global ending stocks, already forecast at a record, are further raised this month. The season-average farm price is unchanged at $4.60 per bushel.


Overall, wheat prices were up in September, largely on concerns over dry conditions in some competing countries, especially Australia. Prices fell back slightly at the end of the month in response to NASS reports which indicated a larger-than-expected spring wheat crop as well as higher-than-anticipated stocks. Hard Red Winter (HRW) and Soft Red Spring (SRW) were both up $16/ton to $202 and $180, respectively. While Soft Winter White (SWW) improved $5/ton to $201 and Hard Red Spring (HRS) increased $4/ton to $277.

Global Wheat Trade Skyrockets in 10 Years

Global trade in 2017/18 is forecast at a record, having grown by nearly 60 percent over the last decade. Growing import demand in Southeast Asia, Sub-Saharan Africa, and the Middle East accounts for the majority of the growth in global trade. In Southeast Asia, import demand has climbed with rising populations and a change in consumer preference from rice to wheat-based products. Additionally, wheat is commonly used in feed rations, especially for aquaculture. In Sub-Saharan Africa and the Middle East, consumer demand for wheat-based products is expanding based on rapidly growing urban populations. Given agronomic and climatic conditions in those regions, production has not kept pace with consumption growth and imports have filled the gap.

Larger production in exporting countries has also contributed to the rising tide of wheat trade. Among major exporters, the European Union, Russia, and Ukraine have seen the most significant growth in production, spurred by both larger planted areas and higher yields. Consumption in those countries has grown at a much slower rate, leaving substantially larger exportable supplies. Further, these suppliers benefit from freight and logistical advantages in reaching many growth markets in Africa and the Middle East. With competitive prices, Ukraine has greatly expanded shipments to Asia as well. The combined market share for these three suppliers has nearly doubled during this period, with the European Union and Russia forecast to surpass the United States in total export volume this year.


Selected Importers

  • India is down 500,000 tons to 3.5 million based on a larger domestic crop.
  • Iraq is elevated 200,000 tons to 2.9 million due to the pace of flour trade from Turkey.
  • Turkey is lowered 500,000 tons to 4.5 million based on a larger domestic crop.

Selected Exporters

  • Argentina is raised 500,000 tons to 12.0 million on a strong pace of trade at the start of the trade year.
  • Australia is cut 1.0 million tons to 20.0 million based on a smaller crop.
  • Canada is up 500,000 tons to 21.0 million based on a larger crop.