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

1
U.S. Wheat AssociatesWorld and U.S. Wheat
Supply and Demand

• November 2005
• Source USDA, World Agricultural Supply and
  Demand Estimates

2
Production Outlook 2005/06

• Worldwide production pegged at 611 MMT, down 2
  (15 MMT) from 2004/05 record harvest. Second
  highest level on record
• Harvested area unchanged from last year
• Projected yields down from 2004/05 bumper crop
• Northern hemisphere harvests finished mixed
• FSU production well above average (92 MMT)
• 6 above 2004/05 and 50 above 2003/04
• 19 MMT above 10 year average
• Major production declines seen in EU 25 (14 MMT)
  and Morocco (3 MMT)
• Southern hemisphere conditions also mixed
• Australian forecasted production of 22.5 MMT, up
  1 MMT from last year
• Argentine drought projected to decrease
  production by 4 MMT from last year

3
Consumption Outlook 2005/06

• World demand continues to grow forecast up 2
  (12 MMT) this year after 3 (20 MMT) increase in
  2004/05
• Feed use up 7 (7 MMT)
• Increases in Europe and FSU
• Food use up 1 (5 MMT)
• Population growth in South Asia and North Africa,
  consumption growth in Nigeria

4
Stocks, Trade and Price Outlook 2005/06

• World stocks 18 (32 MMT) below 10-year average
• Major Exporters holding higher carry-in stocks,
  46 (18 MMT) increase over last years levels
• Increased export competition
• FSU exports forecast up 27 (4 MMT) and the EU
  11 (1.5 MMT)
• Argentine exports down by nearly 50
• U.S. Farm Gate Prices stable
• 3.25 to 3.55/bushel (119-130/MT) compared
  with 3.40 (125/MT) in 2004/05 (Average U.S.
  farm gate price, marketing year weighted average)
• U.S. Export prices mixed
• HRS and HRW have strengthened
• SRW and soft white are weaker

5
Preliminary Production Outlook 2006/07

• Northern Hemisphere Winter Planting Underway
• FSU drought
• Russia and Ukraine acres expected to decline by
  15-20
• low domestic prices
• financial problems in the farming sector
• drought delayed planting
• US Soft Wheat Acreage Up, Hard Wheat Conditions
  Questionable
• High fertilizer costs cause acreage shift from
  corn to SRW
• Conditions remain somewhat dry in some HRW areas

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World Production and Use
Source all data is from USDA, World
Agricultural Supply and Demand Estimates November
10, 2005 release (unless otherwise noted)
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Wheat Supplies in Top Five Exporting Countries
Includes U.S., Canada, Australia, Argentina, and
EU-25
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Wheat Supplies in Top Four Exporting Countries
Includes U.S., Canada, Australia and Argentina
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World Wheat Supply and Demand
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World Beginning Stocks
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Global Stocks-to-Use Ratio
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World Stocks and Price
Prices are marketing year averages2005/06
current year-to-date average
Source U.S. Wheat Associates Price Report as of
11/10/05
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Top Five Exporter Stocks and Price
Prices are marketing year averages2005/06
current year-to-date average
Top 5 Exporters include U.S., Canada, Australia,
Argentina and EU-25 Price Source U.S. Wheat
Associates, Price Report as of 11/10/05
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World and U.S. Wheat Supply and Demand

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

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Canada Production and Exports
16
Canada Ending Stocks
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Australia Production and Exports
18
Australia Ending Stocks
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Argentina Production and Exports
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Argentina Ending Stocks
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EU-25 Production and Trade
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EU-25 Ending Stocks
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U.S. Production and Exports
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U.S. Ending Wheat 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
Source USDA National Agricultural Statistics
Service
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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
• Nontraditional Exporters
• Import Demand
• U.S. Situation by Class

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India Beginning Stocks and Production
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India Net Trade
Net Exports
Net Imports
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Pakistan Net Trade
Net Exports
Net Imports
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India and Pakistan Net Trade
Net Exports
Net Imports
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FSU-12 Production and Utilization
FSU-12 includes former Soviet Union, excluding
Baltic States
37
FSU-12 Ending Stocks
38
FSU-12 Net Trade
FSU-12 includes former Soviet Union, excluding
Baltic States
39
Black Sea Exports
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Wheat Production in EU, Nontraditionals, and Top
Four Exporters
Nontraditional exporters include FSU-12, India
and Pakistan Top four exporters include U.S.,
Canada, Australia and Argentina
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U.S. and Nontraditional Exports
Nontraditional exporters include FSU-12, India
and Pakistan
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Net Exports of Leading Suppliers
Nontraditional exporters include FSU-12, India
and Pakistan Top four exporters include U.S.,
Canada, Australia and Argentina EU includes EU-15
data prior to 1999/00
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Nontraditional 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 2003/04 vs. 2004/05
Source Foreign Agriculture Service Export Sales
Report (year-end summary)
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Top 10 Customers for U.S. Wheat2004/05 vs.
2005/06(year-to-date)
Source USDA FAS export sales report November
10, 2005
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World Wheat Imports
Trend in other importers denoted ( )
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China and FSU Imports
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China Wheat Situation
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World and U.S. Wheat Supply and Demand

• Major Exporters
• Nontraditional 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. Wheat Sales by Class(year-to-date)
Source USDA FAS export sales report 11/10/05
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Change in U.S. Wheat Sales2004/05 vs.
2005/06(year-to-date)
Source USDA FAS export sales report 11/10/05
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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. Wheat Prices (FOB Gulf)
Source U.S. Wheat Associates, Price Report as
of November 10
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U.S. Wheat Prices (FOB PNW)
Source U.S. Wheat Associates, Price Report as
of November 10
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U.S. Gulf Basis Prices
Source U.S. Wheat Associates, Price Report as
of November 10
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U.S. PNW Basis Prices
Source U.S. Wheat Associates, Price Report as
of November 10
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Ocean Freight Rates for Grains
Source U.S. Wheat Associates, Price Report as
of November 10
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Summary

• Global production will be high, the second
  largest crop in history
• Northern Hemisphere - protein content generally
  high, large percentage of feed-use wheat
• Southern Hemisphere - growing conditions mixed
• Australia weather improved
• Argentina production down by 4 MMT
• Larger stocks held in exporter countries
• Production in the FSU-12 very strong
• EU expansion results in large supplies, expect
• Continued export subsidization
• Increased EU competitiveness in Northern Africa
• Increased market competition with
• Exports up 1 MMT in Canada and Australia
• Black Sea region up 4 MMT
• World trade to rebound to 109 MMT in 2005/06
  although
• U.S. wheat exports to fall from 26 to 25 (1.7
  MMT)