U.S. Wheat Exports Under Pressure

U.S. wheat exports in 2014/15 are forecast down 24 percent from last year and are expected to be the lowest in 12 years. The United States had traditionally been the largest wheat exporter but lost that position to the EU last year. EU exports are forecast at a record high again in 2014/15, continuing to displace the United States as the largest exporter. The EU has abundant supplies, freight and logistical advantages to North Africa and the Middle East, and competitive prices. France has an unusually large supply of feed-quality wheat, which is being exported to Southeast Asian markets.

Further exacerbating the U.S. decline, Canada's exports are forecast to equal U.S. exports for the first time ever at 24 million tons. Canada's exports are the largest in over 20 years, with this year's increase primarily driven by large shipments of durum, which remain in tight supply globally.

Favorable growing conditions in the EU, combined with large carry-in, imply another year of exportable surplus. However, policy uncertainty in Argentina and Russia could create future export opportunities for the United States. On May 12, USDA will release its first global, country-level forecasts for 2015/16.

OVERVIEW

Global production for 2014/15 is raised to a new record driven by increases in both the EU and Pakistan. Global trade is up slightly but short of last year's record. Exporter changes are partly offsetting as Canada, the EU, and Russia are raised this month while Argentina, India, and the United States are cut. The U.S. season-average farm price is raised slightly.

U.S. PRICES:

Export prices for all wheat classes were up in March. Hard Red Spring (HRS) prices jumped $25 to $314/ton. Hard Red Winter (HRW) rose $16 to $262/ton over concerns about adverse weather in parts of Nebraska, Kansas, Oklahoma, and Texas. Soft Red Winter (SRW) and Soft White Winter (SWW) edged up $5 to $239/ton and $7 to $261/ton, respectively.

TRADE CHANGES IN 2014/15

Selected Exporters

  • Argentina is cut 500,000 tons to 5.0 million as the government is slow to issue export licenses.
  • Canada is raised 500,000 tons to 24.0 million on continued strong sales and shipments. Large durum exports this year support the near record export projection.
  • EU is boosted 2.0 million tons to a record, 33.5 million on a recent spike in sales as indicated by a surge in export licenses.
  • India is cut 500,000 tons to 1.7 million on slow shipments and lack of competitiveness.
  • Russia is raised 500,000 tons to 20.5 million on the pace to date, and expectations of continued small shipments to nearby markets.
  • United States is cut 1.0 million tons to 24.0 million on slowing shipments and sales.

Selected Importers

  • Several Sub-Saharan African countries have been added to the PSD database this month starting in 2010/11. Benin, Malawi, Mali, Namibia, Rwanda, and Uganda account for 1.3 million tons of imports in 2014/15.
  • Turkey is raised 300,000 tons to 5.6 million on the fast pace of shipments so far.
  • United States is lowered 100,000 tons to 4.1 million on slower-than-expected durum imports.