RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

US wheat exports set for sharp revival - Macquarie

Twitter Linkedin

A rebound in US wheat exports in latest weekly data represented more than a flash in the pan, and heralds a recovery which will see sales break records, Macquarie said.

The bank acknowledged that wheat export sales by the US, the top shipper, had been "terrible" so far in 2012-13, falling well behind historical levels thanks to the better prices offered for supplies from the likes of Australia and the Black Sea.

"The US has remained uncompetitive internationally for the majority of the season," Macquarie analyst Chris Gadd said.

However, export sales will see meet US Department of Agriculture expectations of 29.9m tonnes (1.1bn bushels) for the full season even though that means a sharp recovery in average volumes to 14.1m tonnes from now on – a record, beating the current high of 13.3m tonnes set two seasons ago.

"Even though from a historical stand point reaching the USDA's export target seems unlikely, we expect it will happen," Mr Gadd said.

Indeed, factoring in rain setbacks to the quality of Argentine and Brazilian supplies, US exports "could possibly exceed" the official target.

'Largely depleted their supplies'

The forecast, which follows data showing the US enjoyed its best wheat shipments in five months in the second week of November, reflected the extent of the run down in supplies in alternative exporters, particularly the Black Sea countries which dominated international tenders in the early months of the season.

"The other major wheat exporters will have largely depleted their supplies to the international markets by the first quarter of 2013," Mr Gadd said.

"Russian and Ukrainian exports are likely to fall to nearly zero as we move into the new year."

The comments came as Ukraine's agriculture ministry performed another u-turn over wheat trade curbs, saying it was "possible to continue exports" even though an informal ceiling of 5.5m tonnes had been reached.

'Most competitive internationally'

US wheat had "become about the most competitive internationally", with soft red winter wheat, the type traded in Chicago, "to see a strong export sales pace" from now on, Mr Gadd said.

"The likelihood would be that the US wins the next tender by Gasc," the grain authority in Egypt, the world's largest wheat importer.

For US hard red winter wheat too, the higher-protein variety traded in Kansas, export sales will "build in the coming months", given new found competitiveness against rival supplies from the likes of Germany.

Price implications

However, brighter prospects for US trade did not imply that wheat prices were poised to soar, with enough competition remaining to keep values in check.

"Dominance in the [soft wheat] market isn't guaranteed as a good supply of Australian standard white wheat should keep prices in check for the remainder of the season."

In harder wheat, "supplies from Australia and Germany should keep US export sales in check if the price were to rally substantially".

The comments came hours after Australia & New Zealand Bank flagged the competitiveness of Australian supplies.

Demand dent

Furthermore, demand from the major importers of the Middle East and North Africa appeared to have waned, given the 15% drop in purchases during the June-to-September period.

"We expect these trends to continue in this region throughout the rest of the season," Mr Gadd said.

"Total demand is unlikely to reach the USDA's current import projections of 21.8m tonnes and 22.1m tonnes for the Middle East and North Africa respectively."

By Agrimoney.com

Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Wheat leads respectable week for US crop exports

Sales of hard wheat - spring and winter - prove particularly strong. Cotton export data return to type - ie with strong sales but...

'Moribund atmosphere' in EU wheat market to extend into 2018-19

... says Strategie Grains, foreseeing another decent harvest, yet little chance of an export revival against tough Russian competition

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069