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

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U.S. Wheat AssociatesWorld Wheat Supply and
Demand Situation

• June 2007

Major data source USDA World Agricultural
Supply and Demand Estimates June 11, 2007
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Production 2007/08

• World - 610 MMT, up 3 (16 MMT) from 2006/07
• Increased exporter prospects threatened by poor
  weather
• U.S. increased winter seeding up 20 (10 MMT)
• Black Sea region better planting conditions, late
  season drought down 2 (1 MMT)
• EU-27 up 2 (3 MMT)
• Canadian acreage down harvest off 10 (3 MMT)
• Australia up 12 MMT, Argentina unchanged
• Worlds largest producers diverge
• China down 3 (4 MMT)
• India up 6 (4 MMT)
• North Africa harvest down
• Morocco off 76 (5 MMT)

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Planted area 2007/08 winter vs. spring

• U.S./Black Sea/EU winter acres up
• U.S. winter wheat up 9 (1.4 mha)
• HRW 9, SRW 13, SW 2
• Weather problems
• U.S. spring freeze, persistent rains in the
  Plains
• Black Sea drought
• Spring wheat plantings down - corn, barley,
  oilseeds very profitable
• U.S. down 7
• Canada down 15
• Kazakhstan down slightly
• Durum up in North America

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Consumption and Trade2007/08

• World use down 1 MMT
• Feed use down 3 (3 MMT), large decrease in EU
  and Canada
• Food use up slightly to 518 MMT, mainly in
  developing countries
• Exports
• Up US (3 MMT), Australia (5 MMT)
• Down Canada (3 MMT), EU (2 MMT)
• China to export 2 MMT (mostly feed quality)
• Imports
• India down to 3 MMT from 6 MMT last year
• North African imports up 2 MMT

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Stocks and Price 2007/08

• World stocks tighten
• Beginning (current) stocks 122 MMT, lowest since
  1982
• Stocks to decline 10 MMT this year, lowest level
  in 30 years
• Stocks in major exporters 23 MMT (38) lower than
  2006/07
• U.S. farm gate prices rise
• 4.50 to 4.10/bushel (165-187/MT)
• 4.27 (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 averages2006/07
current year-to-date average
Top 5 Exporters include U.S., Canada, Australia,
Argentina and EU-25
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Chinese vs. Rest of the World Ending Stocks
China accounted for 49 of world stocks in
1999/2000, down to 30 this year
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World and U.S. Wheat Supply and Demand

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

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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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U.S. Wheat Area and Production
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U.S. Crop Planted Area Comparison
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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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World and U.S. Wheat Supply and Demand

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

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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 June 14,
2007
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Change in U.S. Wheat Sales2005/06 vs.
2006/07(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

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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

• 9 increase HRW 9, SRW 13, SW 2

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U.S. Wheat Sales by Class(year-to-date)
Source USDA FAS export sales report June14, 2007
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U.S. Wheat Ending Stocks by Class
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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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Ocean Freight Rates for Grains
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Summary

• 2007/08 global production up
• 10 MMT below consumption
• Stocks, already tight, shrink further
• World stocks-to-use ratio to historic low 18
• Prices remain strong
• World trade
• North African imports to climb
• Exports fall Canada, EU-27, Argentina, Black Sea
• Australia, U.S. exports rebound