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USDA Grains: World Markets and Trade

12 October 2015

USDA Grains: World Markets and Trade - 12 October 2015USDA Grains: World Markets and Trade - 12 October 2015

USDA Grains: World Markets and Trade Reports

High U.S. Wheat Prices Drive Exports to 44-Year Low

U.S. 2015/16 marketing year exports (June-May) are forecast to drop to the lowest level since 1971/72 because of high relative prices, abundant competitor supplies, and a strong U.S. dollar. International prices are being pressured downward by projected record global production and ample exportable supplies in Australia, Canada, EU, Kazakhstan, Russia, and Ukraine. Although U.S. wheat export prices have fallen, the United States remains largely uncompetitive, even in some traditional markets. Currently, U.S. FOB prices are about $35/MT above both French and Black Sea.

Russian and Ukrainian exports are forecast at record levels. EU exports are projected to be the second highest on record. EU and Black Sea exports have displaced the United States as the primary supplier in many major importing countries in North Africa and the Middle East based on low prices as well as freight and logistical advantages. Furthermore, the United States has recently lost market share in some traditional markets and the trend is expected to continue. For example, Mexico has recently begun importing from France, Russia, and Ukraine. Compared to last year, U.S. export commitments to Mexico are down 27%. Additionally, U.S. market share in Nigeria declined from a five-year average of 76% to 43% last year as lower-priced Russian and EU supplies entered the market. U.S. export commitments to Nigeria are down 38% from last year, further dimming prospects for market share recovery.

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