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Current U.S. Wheat Export Sales Outpace 5-Year Average

Dec 01, 2016

By Stephanie Bryant-Erdmann, USWheat Associates,  Market Analyst

Five months into the 2016/17 marketing year (June to May), total U.S. export sales of 18.9 million metric tons (MMT) are 30 percent ahead of last year’s pace and 7 percent ahead of the 5-year average pace. Soft red winter (SRW) and durum sales continue to be slower than last year, but as of Nov. 24, volumes in seven of the top 10 U.S. export markets from 2015/16 are higher than last year, while Taiwan is matching last year’s pace. Hard red winter (HRW) has already exceeded both 2014/15 and 2015/16 total sales, and is 25 percent ahead of the 5-year average on the same date. Both HRW and hard red spring (HRS) year-to-date exports are the largest since 2010/11. White wheat sales are also ahead of both last year’s pace and the 5-year average pace. USDA projects 2016/17 exports will rise to 26.5 MMT, which, if realized, would be 26 percent higher than 2015/16.

USDA reported HRW year-to-date exports at 7.58 MMT, up 93 percent from the prior year. Brazil and Mexico are now the number one and number two largest HRW purchasers. As of Nov. 24, HRW sales to Brazil totaled 1.01 MMT, which is on par with total Brazilian 2014/15 HRW imports. Sales to Mexico are also up 80 percent year over year at 1.04 MMT, nearly equal to last year’s total HRW purchases as well. HRW purchases by Japan total 571,000 metric tons (MT), up 22 percent from 2015/16. To date, HRW sales to Colombia, Ecuador, Indonesia and Thailand are already greater than total 2015/16 HRW sales. Year-to-date sales to Chile and Peru are nearly three times greater than each country’s total HRW imports last year.

As of Nov. 24, exports of soft white (SW) wheat are up 19 percent year over year at 3.28 MMT. That is also 5 percent ahead of the 5-year average on this date of 3.12 MMT. Sales to the Philippines and Japan, the two largest SW purchasers, are up 16 percent and 22 percent, respectively. Year-to-date, Philippine millers purchased 772,000 MT, up more than 100,000 MT from 2015/16. U.S. SW sales to Thailand and Indonesia are also up. Year-to-date, Indonesia has purchased 264,000 MT, compared to total 2015/16 purchases of 166,000 MT. Thailand’s imports are up 25 percent year over year at 167,000 MT.

HRS sales of 5.98 MMT are up 29 percent year over year, and 28 percent ahead of the 5-year average pace. As of Nov. 24, buyers in the Philippines purchased 1.13 MMT, up 44 percent from 2015/16. The Philippines is the top HRS buyer, and sales to seven of the top ten HRS customers are also ahead of last year’s pace. Japanese HRS purchases are 21 percent ahead of last year’s pace at 633,000 MT. Sales to China of 480,000 MT are up 39 percent from last year’s sales on the same date. Thailand, Venezuela and the Dominican Republic HRS sales are already greater than their respective total 2015/16 sales.  

Sales of SRW for 2016/17 are down 34 percent year over year at 1.61 MMT despite the improved quality of the 2016/17 harvest and the lowest prices in ten years. While SRW has excellent end-use characteristics for cookies, crackers and cakes, a large portion of SRW is historically used as a blending flour and for inexpensive flatbread production. Due to the large global supply, SRW faces perhaps the most competition in world markets for these two uses. SRW sales are the strongest to countries where cookie, cracker and cake production facilities are located, which is also the highest-value usage. Sales to Honduras are 26 percent ahead of 2015/16 at 85,000 MT. Sales to Peru and the Dominican Republic are both up 5 percent from 2015/16, at 105,000 MT and 90,000 MT, respectively. Sales to other Central American countries, including Guatemala, Jamaica and El Salvador, are also ahead of the 2015/16 pace.

On average, 53 percent of U.S. total durum sales occur from June through November. Year-to-date durum exports total 334,000 MT, down 40 percent from the same time last year and 16 percent behind the 5-year average pace. The slow export sales are due to “just-in-time” purchasing pattern many companies adopted as they waited for final Northern Hemisphere durum quality to be known. However, with significant quality concerns in Canada, U.S. traders report renewed interest in U.S. durum. To date, Nigeria, the European Union (EU) and Algeria are the top durum buyers. A significant portion of year-to-date 2016/17 sales is designated as “sales to unknown destinations.”

Source: US Wheat Associates