U'S' Wheat Associates World Wheat Supply and Demand Situation

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U.S. Wheat AssociatesWorld Wheat Supply and
Demand Situation

• March 2008

Major data source USDA World Agricultural
Supply and Demand Estimates March 11, 2008
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Top 10 Factors Affecting the Global Wheat Market

• World stocks at 30 year low export origin
  holdings down 29 stocks-to-use at historic low.
• U.S. export pace up 54 from last year. With 13
  weeks in the marketing year to go, exportable
  supplies are dwindling.
• Import demand explodes, despite record prices
• Importers remove import restrictions/subsidize
  consumption
• Global food use demand sets a new record, 10 MMT
  above 2006/07
• Exporters impose export restrictions
• Ukraine/Russia/Argentina impose export
  restrictions
• U.S. winter wheat seedings below expectations.
• Planted area increased for SW and SRW while HRW
  fell from last year. HRW entered dormancy in very
  dry conditions.
• Strong competition between crops in HRS region,
  seeding report released March 31. Durum expected
  to rise.
• Global plantings to rise. EU and Black Sea
  planted area up.
• Biofuel production strengthens competing crop
  prices globally.
• Ocean freight rates at record highs
• 2008/09 beginning stocks at bin bottoms
• Dollar exchange rate plummets

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Production 2007/08

• World - 605 MMT, up 2 (12 MMT) from 2006/07
• Exporter production diminished by poor weather
• U.S. up 14 (7 MMT) despite freeze and persistent
  rains in winter wheat regions
• Canadian down harvest off 21 (5 MMT)
• Australia suffers second year of drought harvest
  down 7 MMT from 10-year average.
• Argentina late season freeze
• 2008/09 Plantings forecast up
• EU and Black Sea 10, SW/SRW
• HRS, Canadian CWRS acreage in question

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Consumption and Trade2007/08

• World food use sets new record
• Up 10 MMT to 520, mainly in developing countries.
  Not deterred by high prices
• Feed use down 6 (6 MMT)
• Exports
• Up US (9 MMT)
• Down Canada (-6), EU (-4), Australia (-1)
• China to export 3 MMT (mostly feed quality)
• Imports
• India down to 2 MMT from 6 MMT last year
• North African imports up

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Stocks and Price 2007/08

• World stocks tighten
• Beginning stocks lowest since 1982
• Stocks to decline 15 MMT this year, lowest level
  in 30 years
• Stocks in 5 major exporters to end year 27 (10
  MMT) lower than 2006/07
• U.S. farm gate prices rise
• 6.50 to 6.80/bushel (239-250/MT)
• Record high
• 4.26 (157/MT) in 2006/07
• World export prices much stronger
• Average U.S. farm gate price, marketing year
  weighted average

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World Production and Use
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Supplies in Top Five Exporting Countries
Includes U.S., Canada, Australia, Argentina,
and EU-25
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World Wheat Supply and Demand
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World Beginning Stocks- lowest since 1982
Five Major Exporters include U.S., Canada,
Australia, Argentina, and the EU-25
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Global Stocks-to-Use Ratio
Ending stocks
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World Ending Stocks and Price
Prices are marketing year averages2007/08
current year-to-date average
Top 5 Exporters include U.S., Canada, Australia,
Argentina and EU-25
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Import Demand
• U.S. Situation by Class
• Outlook

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Canada Situation
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Canada Ending Stocks
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Australia Situation
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Australia Ending Stocks
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Argentina Situation
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Argentina Ending Stocks
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EU-27 Situation
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EU-27 Ending Stocks
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Black Sea Region Situation

• The Black Sea Region includes the Former Soviet
  Union, excluding the Baltic States
• Russia, Ukraine and Kazakhstan are the most
  important wheat producers in the Black Sea Region

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Black Sea Exports
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Black Sea Ending Stocks
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U.S. Situation
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U.S. Ending Stocks
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U.S. Share of Wheat Export Market
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Import Demand
• U.S. Situation by Class
• Outlook

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Major World Wheat Importers(from all origins)
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Top 10 Customers for U.S. WheatPrior Marketing
Years 2005/06 vs. 2006/07
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Top 10 Customers for U.S. Wheat2006/07 vs.
2007/08(year-to-date)
Source USDA FAS export sales report February 7,
2008
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Change in U.S. Wheat Sales2006/07 vs.
2007/08(year-to-date)
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World Wheat Imports
Trend in other importers denoted ( )
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China Wheat Situation
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India Beginning Stocks and Production
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India Net Trade
Net Exports
Net Imports
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Import Demand
• U.S. Situation by Class
• Outlook

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U.S. Hard Red Winter
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U.S. Hard Red Spring
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U.S. Soft Red Winter
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U.S. White
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U.S. Durum
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U.S. Winter Wheat Planted Acreage

• 2008/09 estimates USDA, January 11, 2008
• 4 increase SRW 21, SW 7, HRW -1

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U.S. Spring Wheat Plantings

• 2008/09 HRS seedings unknown - strong competition
  in HRS region barley, canola, dry beans
• Durum expected to rise 20

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U.S. Wheat Sales by Class(year-to-date)
Source USDA FAS export sales report March 6,
2008
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U.S. Year to Date Sales vs.USDA Export Forecast
Sales to March 6, 2008 Marketing year is June 1
to May 31 HRW 96 of forecast, SRW 97, HRS 96,
SW 96, durum 93 (not including 435,000 MT in
donations)
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U.S. Year to Date Sales and Exports vs.USDA
Export Forecast
Sales to March 7, 2008 Marketing year is June 1
to May 31
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U.S. Wheat Ending Stocks by Class
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U.S. Stocks to Use Ratios
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U.S. Wheat Supply and Demand
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U.S. Wheat Supply and Demand
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U.S. FOB Gulf Prices
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U.S. FOB PNW Prices
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SRW and Soft White Prices
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U.S. Gulf Basis Prices
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U.S. PNW Basis Prices
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Import Demand
• U.S. Situation by Class
• Outlook

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U.S. Wheat Area and Production
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U.S. Crop Planted Area Comparison
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Corn/Wheat Price Spread
Friday closes at the CBOT
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World CornProduction, Use and Trade
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World SoybeanProduction, Use and Trade
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World WheatProduction, Use and Trade
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Ocean Freight Rates for Grains
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Summary

• 2007/08 global production hurt by weather
  problems
• Consumption exceeds production again
• Stocks, already tight, shrink further
• World stocks-to-use ratio to historic low 18
• Prices strengthen dramatically
• World exporters
• Exports fall Canada, EU-27, Argentina, Black Sea
  and Australia
• U.S. exports nearly tapped out
• 2008/09 planted area
• UP SRW and SW, Europe, Black Sea
• DOWN HRS and Canada