U.S. Wheat Exports Start 2016/17 Fairly Strong
By Stephanie Bryant-Erdmann, USWheat Associates, Market Analyst
U.S. commercial sales for marketing year 2016/17, which began June 1, are off to a welcome start. As of July 7, U.S. wheat export sales for all classes totaled 8.78 MMT, up 35 percent from export sales on the same date in 2015/16. USDA now expects 2016/17 exports to total 25.2 MMT, up 19 percent from 2015/16, noting that this would be the highest volume in three years.
USDA reported hard red winter (HRW) year-to-date exports at 3.29 MMT, up 86 percent from the prior year. Significantly higher demand from Brazil is expected this year after rain delayed harvest and damaged wheat quality in both Brazil and Argentina, normally Brazil’s top supplier. As of July 7, HRW sales to Brazil totaled 232,000 MT, more than double the volume to Brazil at the same time last year. Sales to Mexico are also up 81 percent year over year due to more competitive pricing. To date, Chilean and Peruvian HRW sales are already greater than total 2015/16 HRW sales.
Sales of soft red winter (SRW) for 2016/17 are down 35 percent year over year at 827,000 MT, due in part to smaller carry-in stocks of milling quality SRW and early market perceptions about a recurrence of quality issues in this year’s crop. However, with nearly half of the 2016/17 SRW production safely in the bin, quality looks much improved. Sales to some Latin American countries, including Honduras, El Salvador and Costa Rica are slightly ahead of last year’s pace.
Hard red spring (HRS) sales of 3.02 MMT are up 53 percent year over year. As of July 7, buyers in the Philippines purchased 437,000 MT, nearly double their volume last year at the same time. The Philippines is the top HRS buyer, and sales to eight of the top ten HRS customers are also ahead of last year’s pace. Sales to the European Union (EU) of 157,000 MT are nearly triple last year’s sales on the same date. Year to date sales to Venezuela of 145,000 MT are nearly equal to total 2015/16 HRS sales.
As of July 7, exports of soft white (SW) wheat are up 27 percent year over year at 1.51 MMT. Sales to the top three SW customers — Philippines, Japan and South Korea — are all ahead of 2015/16 pace. U.S. SW sales to Thailand and Indonesia are also up. Year-to-date, Indonesia has purchased 110,000 MT, up from 42,000 MT on the same date in 2015/16. Thailand sales are up 57 percent year over year at 74,000 MT.
High prices continue to constrain durum exports. Year to date durum exports total 128,000 MT, down 54 percent from the same time last year. To date, Nigeria, the EU, Guatemala and Panama are the top durum buyers. A significant portion of these 2016/17 sales are designated as “sales to unknown designations.”