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WMR-World Wheat Trade Dynamics 2020

By: Jim Peterson
Posted: Oct 08 2020

World wheat exports are projected to reach 6.96 billion bushels in 2020, down about one percent from the record level set last year.  Most of the major export countries/regions will see stable to slightly higher exports, with the exception of the EU and Australia. The EU is projected to drop sharply due to a challenging production season, while Australia is expected to rebound significantly, with potentially it’s third largest crop on record, after consecutive years of drought.  This will change some of the dynamics for U.S. wheat exports in 2020.

The FSU-3 represents the combined exports of Russia, the Ukraine and Kazakhstan, and that region remains the largest exporter in the world.  Stable trends the last three years have been supportive to world prices, and recently, growing concerns over dry conditions hampering the planting of next year’s crop, are beginning to add further support, with some discussion of potential curbs on exports this year.  Canada’s latest production estimate puts their crop as the second largest on record, giving them momentum to potentially reach a record level of exports in 2020.  In Argentina, recent dryness is hampering their production prospects, dropping export projections from mid-summer, but the country still looks to remain at a high level of export competitiveness. 

The U.S. early season export pace is running ahead of the current USDA projection, which is up 1% from a year ago.  As of mid-September, 514 million bushels have been sold, about 8% higher than 2019.  Sales have been paced by strong hard red winter, hard red spring and soft white exports, and an uptick in buying by China.  China is projected to import more than 250 million bushels this year, the highest level in nearly 25 years.   The pace of U.S. exports may wane as Canada ramps up sales, and the Australian and Argentina crops are harvested in the coming months, but the stronger than expected start should help the U.S. remain on target to meet or exceed current projections.

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