U.S. Wheat Sales 11 Percent Above Average Near Marketing Year End
By Casey Chumrau, US Wheat Associates Market Analyst
The 2013/14 marketing year officially ends on May 31, but we will not know for couple of weeks if U.S. commercial wheat sales will meet USDA’s forecasted 32.3 million metric tons (MMT). However, U.S. exports have already far exceeded last year’s sales, a mark surpassed on Feb. 20.
As of May 15, total known outstanding sales and accumulated exports of all classes of wheat for the 2013/14 marketing year were 31.8 MMT, 16 percent greater than total 2012/13 exports of 27.4 MMT and 11 percent greater than the five-year average of 28.5 MMT. Sales increased for four of the six U.S. wheat classes.
Hard red winter (HRW) exports of 12.0 MMT, as of May 15, were 14 percent higher than the same date a year earlier. USDA predicts total HRW sales will reach 12.4 MMT, 3 percent higher than the five-year average. Brazil, which imported an average of 319,000 MT of HRW the last five years, has purchased 4.09 MMT in 2013/14, accounting for 34 percent of total HRW sales as of May 15. A small Argentinian harvest for the second consecutive year resulted in government-imposed export limits and forced Brazil to look outside the Mercosur trading block to fulfill the unmet demand. Sales to most of the other top 10 HRW customers from 2012/13 are lagging last year’s pace, mainly due to higher prices relative to competitors. Colombia, in the second year of the free trade agreement with the United States, increased year-over-year imports by 39,000 MT to 454,000 MT, compared to the five-year average of 328,000 MT.
The People’s Republic of China has accounted for 47 percent of total 2013/14 soft red winter (SRW) sales as of May 15. China strives to produce enough wheat to keep stocks at relatively high levels but with increasing consumer demand that has not been possible. As a result, purchasers took advantage of high-quality wheat at attractive prices to buy 3.57 MMT of SRW to date. For comparison, annual SRW exports to China the last five years averaged 117,000 MT. The higher Chinese sales this marketing year helped offset lower exports to eight of the other top 10 customers from last year, including a 70 percent decrease in Egypt, which had access to abundant supplies of lower priced Black Sea wheat in 2013/14. Total SRW sales surged 41 percent to 7.56 MMT as of May 15, up from the five-year average of 4.21 MMT and the most since 1989/90.
Hard red spring (HRS) sales are also ahead of last year’s pace. Unlike HRW and SRW, where a single country accounted for most of the increase, the majority of top 2012/13 HRS customers slightly increased imports, resulting in an overall 18 percent sales boost. Total HRS sales were 7.12 MMT as of May 15, up from 6.02 MMT last year on the same date and the five-year average of 6.74 MMT. Higher sales to the Philippines, Taiwan, China and Venezuela offset a 12 percent drop in sales to Japan, typically the top HRS customer.
Exports of hard white and soft white (SW) wheat fell a combined 1 percent from last year to 4.58 MMT as of May 15. Noting that 2012/13 included unusually high sales of SW to Japan and South Korea for feed use, white wheat sales fell behind pace early in 2013/14 following the discovery of an unapproved but isolated GM event last May, then steadily picked up as the year progressed. As of July 25, white wheat exports were 18 percent behind 2012/13. As of Dec. 26, sales were just 11 percent below last year’s pace. Sales to Japan, the top white wheat importer on average the last five years, fell 19 percent year-over-year to 854,000 MT. However, increases to the Philippines, South Korea, Indonesia and Thailand helped make up the difference.
Despite higher exports to the EU countries, durum sales were 7 percent behind 2012/13 as of May 15. Total sales of 532,000 MT fall well short of the five-year average of 910,000 MT. High prices compared to Canadian durum have hindered exports the past few years. Venezuela was the only country outside of the European Union to increase imports significantly, up from 51,000 MT last year to 82,000 MT in 2013/14.
USW will report final 2013/14 commercial sales as soon as the data is available. Throughout the marketing year, USW tracks current U.S. wheat sales on the USW website at http://www.uswheat.org/commercialSales