USDA reported hard red winter (HRW) year-to-date exports at 3.29 MMT, up 86 percent from the prior year. Significantly higher demand from Brazil is expected this year after rain delayed harvest and damaged wheat quality in both Brazil and Argentina, normally Brazil’s top supplier. As of July 7, HRW sales to Brazil totaled 232,000 MT, more than double the volume to Brazil at the same time last year. Sales to Mexico are also up 81 percent year over year due to more competitive pricing. To date, Chilean and Peruvian HRW sales are already greater than total 2015/16 HRW sales.
Sales of soft red winter (SRW) for 2016/17 are down 35 percent year over year at 827,000 MT, due in part to smaller carry-in stocks of milling quality SRW and early market perceptions about a recurrence of quality issues in this year’s crop. However, with nearly half of the 2016/17 SRW production safely in the bin, quality looks much improved. Sales to some Latin American countries, including Honduras, El Salvador and Costa Rica are slightly ahead of last year’s pace.
Hard red spring (HRS) sales of 3.02 MMT are up 53 percent year over year. As of July 7, buyers in the Philippines purchased 437,000 MT, nearly double their volume last year at the same time. The Philippines is the top HRS buyer, and sales to eight of the top ten HRS customers are also ahead of last year’s pace. Sales to the European Union (EU) of 157,000 MT are nearly triple last year’s sales on the same date. Year to date sales to Venezuela of 145,000 MT are nearly equal to total 2015/16 HRS sales.
As of July 7, exports of soft white (SW) wheat are up 27 percent year over year at 1.51 MMT. Sales to the top three SW customers — Philippines, Japan and South Korea — are all ahead of 2015/16 pace. U.S. SW sales to Thailand and Indonesia are also up. Year-to-date, Indonesia has purchased 110,000 MT, up from 42,000 MT on the same date in 2015/16. Thailand sales are up 57 percent year over year at 74,000 MT.
High prices continue to constrain durum exports. Year to date durum exports total 128,000 MT, down 54 percent from the same time last year. To date, Nigeria, the EU, Guatemala and Panama are the top durum buyers. A significant portion of these 2016/17 sales are designated as “sales to unknown designations.”
2. The U.S. Wheat Industry Helps Celebrate 100 Years of Grain Standards
On July 12, USW Chairman Brian O’Toole and National Association of Wheat Growers (NAWG) President Gordon Stoner sent a letter of congratulations to USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) on the 100th anniversary of the U.S. Grain Standards Act of 1916 (USGSA). Chairman O’Toole and President Stoner also told GIPSA Administrator Larry Mitchell that the remarkable benefits from the USGSA to the U.S. grain supply chain and its customers is worthy of an official proclamation from the U.S. Congress recognizing the Act and this important milestone.
The USGSA was a landmark law that helped resolve chaotic and inefficient marketing conditions and increase the trust in U.S. agricultural commodities. U.S. grain standards for wheat were established under the Act in 1917. Then, when fraud in the system again threatened the credibility of the U.S. grain marketing system, Congress amended the Act in 1976 to establish official weighing services, record keeping by elevators, registration of grain exporters, and user fees to cover federal supervision costs. Importantly, that amendment established the Federal Grain Inspection Service (FGIS) and required either federal or state agency inspections for export.
“It would be nearly impossible to calculate the value of the USGSA and the FGIS to America’s wheat farmers and their customers,” O’Toole and Stoner noted. “Today, the work FGIS does represents a critical component in U.S. wheat’s reputation as the world’s most reliable supply. With half of the wheat that U.S. farmers produce every year available for export, inspection helps increase the value of that wheat to overseas customers.
“When USW brings buyers to the United States, one of the first stops is almost always at an FGIS regional office or laboratory at an export elevator,” they added. “Buyers around the world know that the wheat they tender for from the United States is the wheat that will be loaded on the vessel. FGIS inspection logs give importers the data to extract the most value from their tenders. If there is a discrepancy, buyers know that experienced workers at the National Grain Center in Kansas City, MO, have the samples needed to conduct another impartial inspection.”
O’Toole and Stoner went on to say that overseas buyers are more willing to purchase U.S. wheat because they have confidence that our industry, growers and grain grading system consistently deliver high value products.
The wheat leaders concluded: “On behalf of the wheat farmers USW and NAWG represent and their customers, we thank Congress, GIPSA, FGIS and the hundreds of individual grain inspectors across the country and we look forward to the next 100 years of collaboration as we grow and prosper together.”