Despite a robust start to the year, U.S. wheat exports for 2017/18 are forecast down amid a smaller crop and large competitor supplies. Still, U.S. export commitments (accumulated exports plus outstanding sales) in the first three months of the 2017/18 marketing year (June- May) are comparable to the same period last year as slightly higher accumulated exports mostly offset lower outstanding sales.
U.S. wheat has been competitive in the global market in recent months, with large shipments to Japan, Mexico, the Philippines, and Nigeria. With abundant carryin supplies, combined with a slightly earlier harvest than some competitors, the United States had relatively strong exports in the early months of the marketing year.
However, tighter new-crop supplies, particularly of high-protein spring wheat, will likely lead to slower exports later in the year.
U.S. wheat exports also face strengthening international competition, particularly from the European Union and Russia. The European Union is harvesting a larger crop than last year and is poised to reinvigorate its exports to North African markets. Russia has been a growing force in the export market over the past 5 years.
With a record crop and massive carryin stocks, Russia is expected to be the world’s leading wheat supplier, setting a new record for its exports. The pace of exports from both countries is likely to accelerate through much of 2017/18.
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Competition elsewhere continues as Canada is forecast to export a similar amount as in the previous year. Argentina, Australia, and Ukraine are forecast at historically high levels, but slightly below last year.
Considering that global import demand is projected nearly unchanged from last year, these abundant exporter supplies portend a year of tight competition for global market share.