U.S. Wheat Exports Off to a Slow Start

The U.S. Department of Agriculture reported that at the end of July, wheat exports from the U.S. slowed down compared to the same time last year. Among the largest U.S. wheat importers, commitments were down 27% to the Philippines, 45% to Japan, 48% to Mexico, and 87% to Eqypt. Likewise, exports from origins other than the U.S. have also declined, with the largest decline of 27% projected from the European Union. 

The slow export rate plummeted the wheat price in the global market from US$7.00 per bushel in June to US$5.00 this month. However, two modest price recovery factors could be in the offing next year, said University of Illinois Economist Darrel Good. "First, the strengthening of the El Niño weather pattern poses an increased risk of dry conditions in some Australian wheat production regions. Second, current low cash price bids for the 2010 soft red winter wheat crop could lead producers to further reduce seedings this fall," Good said. It is expected however that wheat inventories would have grown by 512 million bushels (8%) by year end, with 80% increase to occur in China. Stocks would decline in the European Union. 

For details see the press release at: http://www.aces.uiuc.edu/news/stories/news4864.html