During the week of Sept. 25-29, U.S. Department of Agriculture Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor is leading an agribusiness trade mission to Chile. U.S. agribusinesses, including U.S. Wheat Associates (USW), are participating in business-to-business meetings with importers from both Chile and Peru.

The trade mission coincides with the USDA-endorsed Espacio Food and Service trade show, a major food show held in Santiago, Chile. USW joined several other U.S agricultural export promotional organizations in a USDA-SaborUSA Chile exhibit at the show. Under Secretary Taylor visited and offered remarks at the USW exhibit on Sept. 26. USW staff from the Santiago office shared these photos.

In the photo at the top of this page, USW Santiago Assistant Regional Director Osvaldo Seco and Program Coordinator Maria Fernanda Martinez show their pride in the USW exhibit with USW Baking Consultant Miguel Seguel.

Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor (right) is welcomed to the USW section of the SaborUSA Chile exhibit by USW Santiago Regional Director Miguel Galdos.

Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor (right) is welcomed to the USW section of the SaborUSA Chile exhibit by USW Santiago Regional Director Miguel Galdos.

Greetings from USDA

Under Secretary Taylor making remarks at the SaborUSA Chile exhibit on Sept. 26.

Under Secretary Taylor making remarks at the SaborUSA Chile exhibit on Sept. 26. Of her visit and the trade delegation she is leading, Taylor said, “As we celebrate the 200th anniversary of U.S.-Chile relations, I am honored to lead such an incredible group as we work with Chilean importers on expanding our bilateral trade even further.”

Quality Wheat, Exquisite Bread

Artisan bread baked by USW consultant Miguel Seguel to demonstrate the quality and versatility of flour milled from U.S. wheat classes

Artisan bread baked by USW consultant Miguel Seguel to demonstrate the quality and versatility of flour milled from U.S. wheat classes had a prominent place in the SaborUSA Chile exhibit at the Espacio Food and Service trade show.

Chile is a well-developed wheat food market with a variety of products available. In 2022, U.S. wheat imports were valued at more than $100 million. Chile is currently ranked among the top 10 U.S. wheat importing countries in marketing year 2023/24 (June to May). Chilean flour millers import U.S. hard red winter (HRW) and hard red spring (HRS) wheat classes to produce flour for bread consumption. The bread is produced mainly by small artisan bakeries, as well as commercial and supermarket bakeries. To serve a growing cookie and cracker demand, U.S. soft red winter (SRW) and soft white (SW) wheat is imported.

Read more about the Chilean market for U.S. agricultural products here.


Exploring opportunities for hard red winter (HRW), soft red winter (SRW) and durum wheat in both established and emerging markets, U.S. Wheat Associates (USW) led a team of wheat producers and industry representatives to meet with customers and learn about milling and baking processes in Mexico, Ecuador, and Colombia.

USW’s Latin America Board Team included Chet Creel of Texas, Michael Edgar of Arizona, and Keith Kennedy of Wyoming.

“We had a really good group with diverse interests that visited some very important markets to see how millers and bakers use the quality wheat produced back home – and why the quality is important to them,” said USW Director of Trade Policy Peter Laudeman, who led the team on the 10-day mission. “The goal of these Board Teams is to provide a broad canvas of a region, on-the-ground, face-to-face experiences in the mills, in the bakeries, and at the transportation facilities that support movement of U.S. wheat into the countries.”

USW's Latin America Board Team poses for a photo in front of a Grupo Trimex Facility in Mexico following a tour and discussions about U.S. wheat

USW’s Latin America Board Team poses for a photo with USW staff and milling staff in front of a Grupo Trimex facility in Mexico following a tour and discussions about U.S. wheat.

Mexico: U.S. Wheat’s Top Customer

Stops in Mexico included Guadalajara and Mexico City. Outside of Guadalajara, the team visited the Grupo Kasto mill, shuttle train and elevator facility that receives direct rail shipments of U.S. wheat. shuttle train and elevator facility that receives direct rail shipments of U.S. wheat. From there, the team traveled to the Guadalupe Flour Mill to meet with owners of the mill. The Guadalajara portion of the trip also included a tour of the OhLaLa! baking facilities.

In Mexico City, team members visited the USW office, where they learned more about Mexico’s milling industry and efforts to promote wheat foods in the country. Visits to Grupo Trimex and Harinera Anahuac flour mills followed, helping the team explore opportunities for U.S. wheat.

“It was clear U.S. Wheat’s staff has a great relationship in Mexico and there is a lot of trust,” said Creel, Vice Chairman of the Texas Wheat Producers Board and a HRW wheat producer. “We were able to see how activities like technical servicing and educational courses have helped the Mexican milling businesses. We also saw the value of the relationships the representatives in Mexico been built and maintained over the years.”

Ecuador and Colombia: Markets With Great Potential

After Mexico, the team moved on to Ecuador, where it met up with USW representatives serving South America from an office in Santiago, Chile. In Quito, Ecuador, the team visited flour mills and a cookie factory before moving on to Cali, Colombia, for a mill visit. The next day, in Bogota, the team toured a bakery and a pasta plant that uses U.S. durum wheat.

The USW Board Team during a tour of Grupo Superior in Ecuador.

The USW Board Team during a tour of Grupo Superior in Ecuador.

“We had some very good interactions at each stop and had some chances to discuss opportunities for U.S. wheat as a whole,” said Edgar, a USW Board Member and member of the Arizona Grain Research and Promotion Council. “For me, a durum grower, it was valuable to specifically see where my class of wheat stands and the places where it could carve out a bigger share.”

While Mexico is the top customer of U.S. wheat, both Ecuador and Colombia have great potential to increase imports.

“We were able to meet with some companies that really prefer the quality that they’ve seen in U.S. wheat and want to continue to buy,” said Kennedy, Executive Director of the Wyoming Wheat Marketing Commission. “They have definitely seen some pricing pressures, and the competition is there, but customers in both Ecuador and Colombia were very clear that the quality of the U.S. crop is second to none.”

Developing Customers

Laudeman noted that Colombia and Ecuador have a huge amount of room for per capita wheat consumption growth.

“We are looking toward the mid- to long-term opportunities to be able to sell more wheat and boost wheat foods as part of the diets in each country,” said Laudeman, who added that the team noticed interest in soft red winter (SRW) wheat in Ecuador. “As we see bigger crops and healthier crops in the future, it is going to be an easy decision for them to continue to buy U.S. wheat. Meanwhile, we will continue to work on any policy challenges that might be barriers to our market access in these countries. We will certainly keep monitoring and make sure that we can keep the policy landscape healthy. We will also continue to explore opportunities for U.S. wheat.”




The first U.S. Wheat Associates (USW) Latin American and Caribbean Wheat Buyers’ Conference since 2018 was a major success, with more than 150 buyers, traders and logistics professionals coming together in Puerto Vallarta, Mexico to meet representatives of the U.S. wheat industry – including a handful of producers. In the short video below, customers from across the region express their appreciation for the opportunity to learn about the 2023 U.S. wheat crop and discuss the U.S. wheat supply chain. . .




Building upon its long relationship with Brazilian flour millers while also learning about current market conditions across South America, U.S. Wheat Associates (USW) recently took part in the Abitrigo Congress in Foz de Iguazu, Brazil.

During this year's Abitrigo Congress, USW presented a course completion certificate for its Online Baking Certification program to the owner one of Brazil’s largest milling companies

During this year’s Abitrigo Congress, USW presented a course completion certificate for its Online Baking Certification program to the owner one of Brazil’s largest milling companies.

Abitrigo, the association representing the Brazilian wheat milling industry, had not held an in-person annual meeting since 2019. USW President Vince Peterson said attendees from all industry sectors were thrilled to finally be able to engage in business face-to-face.

“Everyone we spoke with noted how nice it was to be back together,” said Peterson, who was joined by USW Vice Chairman Michael Peters and staff members from the USW Santiago Office. “Our presence is a way to show how important Brazilian millers and buyers are to U.S. wheat producers and the entire U.S. wheat industry. It gives us an opportunity to interact with key wheat buyers and have discussions with both new and long-time representatives of the mills.”

Peters, who was attending his first Abitrigo meeting, was impressed with the work of the USW Santiago office, which was represented by Regional Director Miguel Galdos, Assistant Regional Director Osvaldo Seco, Technical Specialist Andres Saturno and Senior Marketing Specialist Claudia Gomez.

“It was very clear that our staff has tremendous relationships with millers in that part of the world and have earned the respect of the industry,” said Peters, a wheat producer and cattle rancher from Okarche, Oklahoma. “It is a tough and competitive market for U.S. wheat, but we’ve remained connected and have done a great job of maintaining U.S. wheat’s reputation for providing a high-quality product.”

USW took center stage during one segment of this year’s meeting when it presented a course completion certificate for its Online Baking Certification program, a new USW technical project that promotes baking methods using all six U.S. wheat classes. The recipient owns one of Brazil’s largest milling companies.

“Having a significant business owner take her personal time to take the USW baking course is quite a compliment,” Peterson noted.

Abitrigo provides more information about its endorsement of the USW Online Baking Certification program on its website.

While Brazil has been importing U.S. wheat for more than 40 years, it still is an extremely competitive market due to Brazil’s domestic production and advantages enjoyed by some U.S. competitors, including Argentina and other countries that have mostly duty-free access under the Mercosur Agreement. In 2019, Brazil agreed to implement an annual duty-free tariff rate quota (TRQ) of 750,000 metric tons of wheat imports from countries not part of the Mercosur Agreement.

Peterson pointed out that the quality of U.S. wheat remains desirable to many Brazilian buyers.

“The core of the Brazilian milling industry recognizes that U.S. hard red winter (HRW) and soft red winter (SRW) wheat – and even hard red spring (HRS) wheat, which has been purchased by Brazilian customers this year – are the most applicable wheat sources to produce the best quality Brazilian wheat food products. Because of this, the market continues to be a long-term priority. And we will continue providing the best service and support we can to Brazilian millers and bakers.”


U.S. Wheat Associates (USW) sees a robust growth opportunity for U.S. wheat exports to South America. To meet rising demand for bread, snacks and other wheat foods, regional flour millers are hungry for information they need to purchase a wider range of high-quality wheat classes.

U.S. wheat must compete in Colombia, Peru, Chile, Brazil and other South American countries with imported Canadian and Argentinian wheat. Technical training and comparative analysis to demonstrate the advantages of U.S. wheat classes are important parts of USW’s work in the region. However, those efforts are somewhat constrained because a substantial portion of the funding for activities was needed for travel costs to conduct activities in sometimes limited facilities in each country or at U.S. educational institutions.

ATP Funding Yields Innovative Idea

A potential answer to this challenge arrived in 2019 when the Agricultural Trade Promotion (ATP) program, administered by USDA’s Foreign Agricultural Service (FAS), was created to help U.S. agriculture build new export markets. Under ATP, USW’s regional South American office staff in Santiago, Chile, proposed an innovative promotional concept to establish a regional flour milling, cereal chemistry and baking laboratory in cooperation with a respected university.

Through pandemic-related delays and customs challenges, USW and its project partner, Universidad Mayor, worked steadily to build a facility on the university’s Santiago campus and equip the lab with a test flour mill, wheat and flour analysis instruments and bread ovens. On Dec. 3, 2021, USW and the university dedicated Laboratorio De Analisis De Granos Harinas Y Panifcacion at an event attended by Chile’s Minister of Agriculture, U.S. State Department and FAS officials, the university rector and executives with several Chilean flour mills.

Photos show honored guests at the dedication of the new lab.

Honored Guests. Learning more about the new lab are, (L to R): Bret Tate, Agricultural Attaché, USDA/FAS; Lisa Swenarski, Counselor for Public Affairs, U.S. State Department; Pedro Pablo Lagos, Purchasing Manager, Luchetti Pasta, Santiago, Chile; Andrés Saturno, Technical Manager, USW/Santiago; Miguel Galdós, Regional Director, USW/Santiago; Lisa Swenarski; María Emilia Undurraga, Chilean Minister of Agriculture; Dr. Patricio Manque, Rector, Universidad Mayor. Photos courtesy of Universidad Mayor.

“We are very pleased to open the first lab of its kind in this region with Universidad Mayor,” said Miguel Galdós, USW Regional Director, South America. “We know that technical managers at South American flour mills have more influence today on the types of wheat their mills need to purchase. USW will be able to help more of those managers understand the differential advantages of U.S. wheat classes by conducting programs at this regional lab. At the same time, having access to consistent and reliable testing and analysis will lead to improvements in production processes and help improve the quality of regional wheat-based end products.”

More Efficient, More Effective

“Before now, South American millers would have to send wheat samples to a commercial company in Guatemala for analysis, so this lab adds much more efficiency in its support for regional customers,” said Mark Fowler, USW Vice President of Global Technical Services, who participated in the dedication event.

As a partner in the new lab, USW purchased and installed all the equipment using ATP funds, while Universidad Mayor built the lab and will cover fixed costs. USW Santiago in return will share equal access with the university to the lab for technical support activities supporting U.S. wheat exports to South America and remain the lab’s only private partner for 15 years.

Photo shows instruments in a new laboratory for measuring wheat quality that will support wheat exports to South America.

Fully Equipped. USW donated the instruments needed to analyze and compare wheat, flour and baking performance at the new lab. Funding for the equipment came from the Agricultural Trade Promotion program administered by USDA/Foreign Agricultural Service. Photo courtesy of Universidad Mayor.

Golden Opportunity

After attending the dedication event, USW Vice President of Overseas Operations Mike Spier called the new lab “a golden opportunity” to demonstrate the competitive baking advantage of U.S. wheat classes compared to wheat from other origins.

“With the ever-changing travel restrictions and quarantines, USW hasn’t been able to organize in-person technical activities for several months,” Spier said. “The lab provides everything USW Technical Specialist Andrés Saturno needs to get back to demonstrating the superior end-use baking performance of U.S. wheat classes to partners in Chile and other customers in USW’s South America region.”

Impressive Team and Project

For USW Chairman Darren Padget, a wheat farmer from Grass Valley, Ore., the dedication event was his first overseas trip to meet with customers in more than two years and his first visit to South America.

“I was very impressed by the enthusiasm of the regional USW team and among the guests at the dedication for this new lab,” Padget said. “I understand why, partly because we visited a supermarket in Santiago and saw the types of bread consumers purchase and how they shop. In Chile, consumption is very high, and they buy most of their bread for the day by the piece. Consumers there and across South America are looking for excellent quality products with a ‘clean label’ – very few additives. I think this lab will help USW demonstrate how flour from our wheat helps millers and bakers meet that demand.”

The evidence of that was on display at the dedication event as artfully crafted bread products and pizza refreshments baked by Master Baker Didier Rosada and his wife Kathy Cruz using flour milled from U.S. wheat. USW frequently works with Rosada’s Red Brick Consulting company to conduct baking seminars in Spanish-speaking countries. The week of the dedication, Rosada and USW held a workshop using U.S. wheat flour for customers representing 75% of Chile’s milling industry.


Impressive artisan bread products display.

An Artful Display. Master Baker Didier Rosada and Katherine Cruz, Red Brick Consulting, produced this impressive display of bread products admired by and shared with guests at the dedication of the new lab, Dec. 3, in Santiago, Chile. Photo courtesy of Universidad Mayor.

Traditional preferences and the landed price of imported wheat will remain a competitive challenge for U.S. wheat in South America. But the complete value of U.S. wheat becomes more obvious to customers through demonstration and training. Now there is a dedicated facility for that work, giving USW the opportunity to interact with regional customers more frequently and invest more of its funding to show them the unique advantages of U.S. wheat.

USW Colleagues at the Lab Dedication that will support Wheat Exports to South America.

Proud Colleagues. The USW/Santiago team who worked tirelessly to build the new laboratory to promote U.S. wheat exports to South America shared their enthusiasm for the project with USW guests. L to R: Mark Fowler, Vice President of Global Technical Services; Maria Martinez, Administrative Assistant; Andres Saturno, Claudia Gomez, Senior Marketing Specialist; Mike Spier, Vice President of Overseas Operations; Paola Valdivia, Finance & Administrative Manager; Miguel Galdos; Osvaldo Seco, Assistant Regional Director; and Darren Padget, USW Chairman.


The effects of weather on the 2021/22 global wheat crop have sparked a run-up in prices even as harvest progresses in the Northern Hemisphere. Given the market’s supply concerns, U.S. Wheat Associates (USW) gathered information from major wheat exporting countries to see what may affect USDA’s next estimates of world supply and demand due on Aug. 12.

Both USDA and the International Grain Council (IGC) still expect 2021/22 global wheat crop production to reach a record level. USDA’s July estimate of 792.4 million metric tons (MMT) was down 2.0 MMT from June. IGC trimmed its latest forecasts by about 1.0 MMT to 788 MMT.

Hot, dry weather in the northern and Pacific Northwest (PNW) regions of the United States and, recently, in Canada, has attracted much of the market’s attention.

United States

The Wheat Quality Council Hard Spring and Durum Tour estimated this year’s hard red spring (HRS/DNS) yield average at 29.1 bushels per acre, compared to 43.1 bushels per acre in 2019. Even so, the tour’s consensus is HRW/DNS protein and kernel size will be very good. U.S. northern durum and soft white (SW) wheat yields are also expected to be down significantly. On the other hand, hard red winter (HRW) and soft red winter (SRW) average yields and production are expected to be higher for 2021/22. In addition, Kansas-based HRW grower Brian Linin, noted, “We put a lot into this crop. Protein [levels] have been awesome.” Follow USW’s weekly Harvest Report for more information.

HRS wheat rows showing effect of drought in North Dakota

Drought in the Northern U.S. Plains could cut the 2021/22 HRS/DNS yield average by one-third, but industry experts expect protein and kernel quality will be good.


Canada, the largest spring wheat producer, has experienced record temperature and drought in portions of its Prairie Provinces. Agriculture and Agri-Food Canada (AAFC) cut its most recent forecast of spring wheat production by 11% to 25.6 MMT, down sharply from previous estimates. That agency also reduced spring wheat export forecasts to 17.7 MMT, down 16% from last year.

South America

In Argentina, dry weather is also a concern, depleting soil moisture for the winter wheat crop and creating a logistics headache. The Buenos Aires Grains Exchange (BAGE) reported potential leaf damage and developmental delays caused by a severe cold front in July. Neighboring Brazil and Paraguay have also experienced potentially damaging cold weather. Brazil experienced some of the lowest temperatures in years throughout July. One local newspaper in Paraguay, “La Nación,” reported there may be a need to import wheat this year instead of marketing excess domestic production.


The European Union’s top wheat-producing states, France and Germany, received persistent rain leading to flooding in some areas, which slowed harvest and created quality concerns. On Aug. 3, France’s farm ministry lowered the estimate for wheat production there by 410 thousand metric tons (TMT), but total production is still expected to be at least 25% more than in 2020/21. In a report following the flooding, a German farmers group suggested there may be crop failures in many areas. Despite this, total German production is expected to be 23.1 MMT, up almost 5% compared to last year. Further east, Romania and Bulgaria each expect to harvest record crops, although official reports said rains could downgrade a portion of Bulgaria’s harvest to feed.

Black Sea

USDA’s May Russian wheat production forecast of 85.0 MMT was seen as bullish by many at the time. Two private Russia-based analysts cited lower-than-expected yields in the Central and Volga regions when they cut their production estimates recently. IKAR cut its forecast for the 2021 wheat crop by 3.0 MT to 78.5 MMT and SovEcon cut its forecast 6.6% to 76.8 MMT. Rosstat, the Russian state statistics agency, reduced winter wheat planted area by 7.5% compared to last year, blaming dry weather. Export prices, as a result, increased at least $7 per MT following the news. The current Russian government export tax scheme is also adding part of that increased export cost.

Ukraine’s wheat harvest lags last year’s pace but yields are up 12% compared to 2020. In reaction to reduced wheat production in Russia, prices for Ukrainian wheat gained $3 to $5 per MT settling between $240 to $243 per MT. The USDA estimates Ukraine’s wheat production to rise 15% this year to 30.0 MMT.

According to one Ukrainian-based broker, farmers in Kazakhstan are expecting a 30% drop in wheat production this year from hot, dry weather in the early summer. The Kazak government is considering banning feed wheat exports while also considering a tax on milling wheat exports following a meeting of the foreign affairs and trade commission last month.


Wheat growing areas of Australia, especially Western Australia, are “looking extremely good” said one analyst with the Australian Export Grain Innovation Centre. Production estimates are expected to fall 17% compared to 2020/21 when Australia produced a record crop. This year’s crop is expected to be 15% above the 10-year average to 28.5 MMT following a 1% increase to the planted area. Some areas are reporting water logging and would benefit from a couple of weeks of sunny dry weather to dry out the fields.

screenshot from Australian Export Grain Innovation Centre

The Australian Export Grain Innovation Centre reports a second year of good wheat production potential after breaking a severe drought in 2020.

In-Born Optimism

Back in the drought areas of the United States, many wheat farmers are looking ahead to the next crop with winter wheat seeding likely to start in some areas by early September. In an interview with the Pacific Northwest Ag Network, Casey Chumrau, Executive Director of the Idaho Wheat Commission, described the farming community’s outlook this way: “The overall sentiment is not great, but they are farmers, so they are thinking next year is going to be better.”

By Michael Anderson, USW Market Analyst


By Michael Anderson, USW Market Analyst

The first predictions for global wheat supplies and demand in the new U.S. marketing year (June 1, 2021, to May 31, 2022) are in. Most estimates call for relatively stable world supplies in 2021/22. Only time will tell the real story, but U.S. Wheat Associates (USW) will be watching several market factors closely over the next few months.

USDA published its initial supply and demand forecast for the new 2021/22 U.S. marketing year this month. According to the May World Agricultural Supply and Demand Estimates (WASDE), estimated world beginning stocks will be 295 million metric tons (MMT), down 2% from 2020/21, with ending stocks also projected at 295 MMT. While global wheat production is expected to reach a record 789 MMT, global consumption is also forecast at a record 789 MMT.

U.S. Stocks Decline

In the United States, except for soft red winter (SRW) wheat, the stocks-to-use ratio for the other wheat classes all declined in 2020/21. For example, soft white (SW) wheat stocks-to-use ratio went from 35% in 2019/20 to 15% in 2020/21.

Along with USW, buyers of soft white (SW) and hard red spring (HRS) wheat will want to monitor the weather across the PNW and Northern Plains, where conditions have been very dry for growing winter crops and newly seeded spring crops. Recent rain has been helpful but spotty. Timely rains will be needed to avoid a fall-off in production for those wheat classes and northern durum.

Late rain in the primary hard red winter (HRW) states has helped the new crop, but it is too soon to know if that precipitation came too late for wheat in sections of Colorado, Kansas and Oklahoma. USW’s Harvest Report is a helpful way to track crop conditions.

Supplies in Other Exporting Countries

Beginning stocks for the five major historic exporters, the United States, Canada, Australia, Argentina, and the European Union (EU), are forecast to be 45 MMT, down from 50 MMT in 2020/21. Ending stocks for 2021/22 U.S. marketing year are forecast to be 42 MMT, a decline of 3 MMT compared to 2020/21.

Ending stocks for the United States, Canada, Australia, Argentina, and the EU reached their highest on record in 2017/18 with 60.0 MMT of global ending stocks. Since then, stocks have fallen. If realized, USDA now expects 2021/22 ending stocks for those five major exporters will be the lowest since 2007/08 at 42 MMT, down 19% from the 10-year average. However, beginning stocks for 2021/22 for Black Sea exporters Russia, Ukraine and Kazakhstan are forecast at 15 MMT, up 67% from 2020/21. The ending stocks forecast for the Black Sea exporters was also raised compared to 2020/21 and double 2019/20 to 18 MMT.

Canada is experiencing dry weather in its key growing regions, adding to anxiety there, beginning stocks and production are all projected down.

Australia is poised for a second consecutive bumper wheat crop. Near perfect conditions ahead of planting season in April and May and favorable crop weather forecasts from the Australian weather bureau have traders there confident. One broker called for a 29.5 MMT crop compared to the WASDE forecast of 27 MMT.

The Rosario Grain Exchange (BCR), an Argentine association, projects a record 20.0 MMT crop for the lead South American wheat producer following a 3% increase in planted area.

Coceral, an EU-based association representing the cereals trade, revised its EU wheat output upward by 4.3 MMT after “excellent yield prospects in the Balkan countries and Spain.” Germany also increased winter wheat sown area by 3%. The European Commission increased its forecast for common wheat production to 126.2 MMT, 6% less than the most recent WASDE report forecast for 2021/22.

Russia Weighs In

It will be interesting to see how USDA adjusts its forecast for Russian wheat production in 2021/22 in its June WASDE report. The May WASDE forecasted 2021/22 production in Russia, the leading world wheat exporter, at 85 MMT, down slightly from the record 2020/21 crop. However, a separate report from the USDA Foreign Agriculture Service Attaché based in Moscow forecast Russian wheat production at a much lower volume. SovEcon, a Russia-based analyst, forecast in May that the Russian wheat crop will be 81.7 MMT.

China Demands Attention

Monitoring China’s actions in global grain trade will be important over the next few months.

Record corn imports have slashed world corn stocks. China has purchased 11.38 MMT of U.S. corn in the current marketing year, and an additional 11.98 MMT is still awaiting shipment. China purchased $400 million of U.S. corn in May 2021 alone.

The effect of China’s unprecedented corn demand on the wheat market should draw any wheat buyer’s attention. China’s unusually large wheat imports beginning in early 2020 through most of 2020/21, including 3.2 MMT of U.S. wheat, helped pull up global wheat prices. Then, as China’s government buyers ramped up corn imports, the price relationship between corn and wheat narrowed and even reversed at times.

Market watchers know that USDA expects wheat feeding in China to reach 40 MMT in 2021/22 but also expects its notoriously large volume of wheat stocks to decline by only 3.0 MMT. And China, notoriously, holds half the world’s wheat stocks, but USDA’s forecast expects ending stocks to be 3.0 MMT less than 2020/21.

IGC Expects Higher Prices

In its May Grain Market Report, the International Grains Council (IGC) noted that despite an increase in wheat production, a rise in consumption and tightened ending stocks in 2020/21 will lead to a drawdown in global grain stocks for 2021/22. The IGC said that ending stocks will be at a seven-year low.

As the 2021 U.S. wheat harvest moves north, USW colleagues, our state wheat commission members and farmers across the country will continue monitoring the critical market factors that affect our overseas customers.


A spike in ocean freight rates is creating some heartburn for dry bulk commodity buyers who may be uncovered over the next few months as strong global demand for grain and coal stresses vessel supply. Fortunately, lower freight futures prices in the second half of 2021 could hold if commodity demand eases, as expected.

“We believe most of our wheat buying customers have booked freight already for April or May deliveries,” said USW Vice President of Overseas Operations Mike Spier. “We hope this spike in freight prices is short term because it obviously increases the landed cost of wheat from the United States and all other suppliers.”

“The ocean freight rates story is all about demand and supply for dry bulk vessels,” said a former U.S. grain trader. “There’s just too much dry bulk movement right now and not enough vessels to cover it.”

“There’s an absolute frenzy now to secure Panamax and smaller vessels to ship coal and grains,” said one U.S.-based freight trader. Usually, bigger ships are more expensive to run than smaller ships and the cost to operate a vessel increases with its size. But the current situation is anything but usual. Because medium-sized, Panamax vessels are more versatile in their loading and unloading capabilities, they are trading at a premium to even capesize vessels, which can ship more than 125,000 MT of dry bulk commodities in one voyage.

Between March 1 and March 2, Panamax quotes for nearby delivery jumped 17% to trade at $21,350 per day — a $6,700 premium to the capesize vessel operating cost. According to independent transportation consultant Jay O’Neil, PNW to Japan Panamax rates for nearby delivery increased 18% between early and late February to $32.00 per MT.

Ocean freight rates for shipping wheat and other grain in Panamax dry bulk vessels are spiking as global demand grows.

Ocean freight rates for shipping wheat and other grain in Panamax dry bulk vessels are spiking as global demand grows.

Chinese Demand Factor

China’s current outsized demand for global commodities is adding the most pressure on the whole dry bulk shipping system. In a unique situation, dozens of vessels loaded with coal are idle off Chinese shores because of the ongoing trade dispute with Australia. Heightened Chinese purchases of corn, soybeans, wheat and even grain sorghum from North and South America also reduces vessel supply around the world.

Looking ahead, “It all comes down to what China will do in Q2, Q3 and Q4,” said another grain exporter. The trade believes if China continues to buy North and South American agricultural commodities at a substantial pace, like in Q3 and Q4 of 2020, Panamax availability could remain tight through 2021 and the landed price of U.S. wheat could remain high.

Bright Spot

As of March 3, however, Panamax futures for Q4 delivery traded at $15,200 per day, substantially lower than the $21,350 per day Panamax futures quoted for nearby delivery. Perspective also comes from looking back to dramatically higher ocean freight rates more than ten years ago when wheat buyers were paying close to $100 per MT and, only one year ago, when rates were near all-time lows.

Suppose global Panamax demand and supply factors reach more equilibrium throughout the year if, for example, Chinese demand for imported coal and agricultural products does ease. In that case, customers could take advantage of the inverted Panamax futures curve to price more competitive freight options for future delivery.

Time will tell. Stay update to date on future U.S. wheat market analysis here.

By Claire Hutchins, USW Market Analyst


After spending 2020 celebrating its 40th anniversary, U.S. Wheat Associates (USW) ended the year saying a fond farewell to a colleague who was with the organization almost from the beginning. Ms. Sonia Muñoz retired from her Regional Program Director position at the USW Santiago Office after 39 years.

“Sonia has managed the South American regional programs efficiently and in a professional manner,” said Miguel Galdos, Regional Director, USW Santiago Office. “Starting 39 years ago with USW as a Secretary/Receptionist, she assumed greater responsibilities over the years due to her abilities and outstanding performance. Her good nature and dedication to her job was present always.”

Sonia Muñoz and Luisa Tornero

Sonia Muñoz in 1989 with Luisa Tornero, former USW Executive Secretary, enjoying our working time.

During her time with USW, Muñoz was responsible for planning and executing various market development programs, seminars and other activities, arranging travel logistics, collaborating with colleagues on reports, and more. During her long career, Muñoz says the most notable change she saw was in the way people communicated and utilized technology.

1981 USW Crop Quality Seminar

1981 – My first year at USW at a Crop Quality Seminar.

“I started when the typewriter and the Telex were in vogue, so to be a secretary in that time was a challenge. We sent large amounts of mail through the post office and email wasn’t even in our imagination,” said Muñoz. “The first computer we had was the ICOM, which we used to send direct messages to the USW Headquarters Office. Through the years, I saw how distances were closer thanks to technological advances in communication.”

Past USW Regional Vice President, Alvaro de la Fuente worked closely with Sonia until his retirement in 2018.

“Sonia was always willing to go the extra mile for the organization’s benefit and had no problem in taking on added responsibilities. Her spirit of loyalty and hard work was recognized over the years and her good nature and friendliness contributed substantially to making the USW Santiago Office environment one that was extremely pleasant to work in,” said de la Fuente. “I can vouch for that, having worked with Sonia for thirty-eight years. I wish her a very happy and much deserved retirement.”

USW Santiago colleagues in 1994

At a farewell dinner for Luisa Tornero, former USW Executive Secretary (left), with Alvaro De La Fuente, former USW Regional Vice President, (middle) and Sonia Muñoz (right) in 1994.

Muñoz says what she enjoyed most about working at USW was the opportunity to grow and develop as a professional and the wonderful people she worked with over the years.

“I am proud and happy that I was privileged to work for this great organization. This experience was one the best things I’ve had in my life. I have worked with excellent professionals and wonderful people and many of them have become good friends. I will keep very good memories of these years,” said Muñoz. “My special thanks to Mr. Alvaro de la Fuente, my former boss for his guidance, trusting me and giving me the opportunity to show my abilities. I would also like to thank my colleagues over the years who enriched me in so many ways. Miguel Galdos, Casey Chumrau, Andres Saturno, Claudia Gomez and Osvaldo Seco, I will miss working with you and the experiences we shared, and specially to my dear friend Paola Valdivia, with whom I shared so much with over the years. To María Fernanda Martinez who will replace me, I wish all the best.”

USW program staff visiting headquarters in 2005

Several USW program staff from overseas visit the USW Headquarters Office in Washington, D.C., in 2005.

In her retirement, Muñoz says she plans to seize and enjoy the things she now has time for, and that now that her kids are also grown, she plans to dedicate time for herself.

All of us at U.S. Wheat Associates thank Sonia for her work and friendship and wish her and her family a long and happy retirement.

Sonia Muñoz with several members of her family.

Sonia Muñoz with several members of her family.

Header Photo: Current USW Santiago Office staff (left to right); Osvaldo Seco (Assistant Regional Director), Paola Valdivia (Finance Manager), Sonia Muñoz (Retiring Regional Program Director), Andres Saturno (Technical specialist), Claudia Gomez (Marketing Manager) and Miguel Galdos (Regional Director).



By Claire Hutchins, USW Market Analyst

USDA currently estimates the United States will export 26.5 million metric tons (MMT) of wheat in 2020/21, 1 percent ahead of last year’s pace, if realized. Five months into marketing year (MY) 2020/21, total U.S. wheat commercial sales are 12 percent ahead of last year’s pace at 16.8 MMT and are 15 percent ahead of the 5-year average.

To date, export sales of hard red winter (HRW), hard red spring (HRS) and white wheat (soft and hard) are significantly ahead of last year’s pace. Sales of soft red winter (SRW) and durum lag 2019/20. Success in individual markets such as China and Brazil due to policy changes and follow-on trade and technical service by U.S. Wheat Associates (USW) are supporting overall sales. As in other markets, competitive pricing for U.S. wheat early in MY 2020/21 helped fuel a faster import pace even by traditionally strong U.S. wheat buyers like the Philippines and South Korea.

HRW. Total HRW sales are 12 percent ahead of last year at 6.12 MMT. Stable exports to Mexico, Nigeria and Japan, the top three markets for HRW, and significantly stronger export programs to China and Brazil are supporting HRW sales in the first third of MY 2020/21.

As of Oct. 29, China has purchased 981,000 metric tons (MT) of HRW after no purchases in 2019/20. Strong HRW export sales so far in 2020/21 can be attributed to the Phase One agreement between the United States and China, as well as competitive HRW prices early in the marketing year. So far in MY 2020/21, China is the second largest market for HRW behind Mexico.

HRW export sales to Brazil are nearly two times more than this time last year at 513,000 MT and are 49 percent ahead of the 5-year average. According to Miguel Galdos, USW Regional Director, South America, the opportunity to advance sales to Brazil came with the Brazilian government opening a tariff rate quota (TRQ) allowing up to 750,000 MT of non-Mercosur (South America’s free trade bloc) wheat to enter the country tariff-free. Strong USW educational programs in Brazil are encouraging millers to take advantage of the high quality and competitive prices of U.S. wheat. To date, Brazil is the fifth largest market for HRW.

“USW provides the best trade and technical service to our customers and we are here for Brazilian mills for any need they have,” said Galdos.

Source: USDA FAS export sales data as of Oct. 29, 2020

HRS. Total HRS export sales of 4.72 MMT are 15 percent ahead of this time last year and are 8 percent ahead of the 5-year average. Sales to the Philippines, the top market for HRS, are 22 percent ahead of last year at 1.30 MMT and are 34 percent ahead of the 5-year average. Rising per capita consumption combined with population growth and competitive HRS prices early in the marketing year supported strong sales to the Philippines at the start of 2020/21.

In Japan, the second largest market for HRS, sales of 569,000 MT are up 20 percent on the year.

“We had good start this year in the Japanese market following the U.S. and Japan trade agreement implemented on January 1,” said Rick Nakano, USW Country Director, Japan. “This gives U.S. wheat a better opportunity to be traded on equal footing with similar classes of wheat from Canada. This results is a great outcome for U.S. wheat to compete equally again with Canadian wheat to meet the needs of Japan’s flour millers.”

Source: USDA FAS export sales data as of Oct. 29, 2020

White. Total U.S. white wheat sales are 41 percent ahead of this time in 2019/20 at 4.02 MMT and are 36 percent ahead of the 5-year average. In the Philippines, the largest market for U.S. soft white wheat, export sales are up 42 percent on the year and are 40 percent ahead of the 5-year average.

The increased demand by Philippine millers is partially due to early customer buying in response to tight export elevation capacity in the Pacific Northwest (PNW). Strong USW educational programs in the Philippines helped customers stay informed and make timely buying decisions in the first third of MY 2020/21.

Sales to South Korea, the second largest market for U.S. soft white wheat, are 79 percent ahead of last year’s pace and are 53 percent ahead of the 5-year average. Soft white wheat on a C&F (FOB and freight) landed basis to South Korea has been priced very competitively.

Looking ahead, Australia’s larger 2020 crop is coming to market and its prices are coming down. USDA predicts the 2020/21 Australian wheat crop will reach 28.5 MMT this year, 87% ahead of last year as beneficial rains pull the country out of a three-year drought.

Source: USDA FAS export sales data as of Oct. 29, 2020

SRW export sales are a different story. Total SRW export sales are down 26 percent on the year at 1.36 MMT, 21 percent behind the 5-year average. SRW export sales to all of the country’s top 10 overseas markets are behind last year’s pace.

“SRW prices are just too high right now,” said one grain trader, “the United States is priced out of the world market, especially to our buyers in Latin America and Nigeria.”

Between early June and late October, the average export price for SRW was $233/MT, 12 percent higher than the same period last year. Limited exportable supplies of SRW along the Mississippi River due to lower planted area in key states and extremely tight export elevation capacity in the Center Gulf due to increased export demand for soybeans and corn continue to support SRW export prices early in MY 2020/21.

Durum. Year-to-date durum sales in 2020/21 are 19 percent behind last year’s pace at 541,000 MT but are 30 percent ahead of the 5-year average. Total sales to Italy, the largest market for U.S. durum, are only 3 percent behind last year’s pace, but are 66 percent ahead of the 5-year average.