By Claire Hutchins, USW Market Analyst
Despite challenging market factors, U.S. wheat exports for marketing year (MY) 2019/20, which ended May 31, totaled 26.9 million metric tons* (MMT) (988 million bushels), ahead of USDA’s export volume estimate of 26.4 MMT (970 million bushels). That is 4 percent ahead of MY 2018/19 and 10 percent greater than the 5-year average of 24.4 MMT (897 million bushels).
Commercial sales of all classes of wheat in MY 2019/20 exceeded 2018/19 levels in part from favorable market factors including abundant exportable supplies, strong harvest qualities, and competitive export prices at the beginning of the marketing year.
This offset such bearish factors as a strong U.S. dollar, competitor’s advantages, difficult winter wheat planting conditions, significant delays to the spring wheat and durum harvests, uncertainty about U.S. trade policies, and recent challenges during the COVID-19 pandemic.
Throughout the year, even in the face of the pandemic restrictions on meetings and travel, U.S. Wheat Associates (USW) representatives were able to sustain a strong level of service and information flow to its customers, with support from its state commissions members and USDA’s Foreign Agriculture Service export market development programs.
Hard Red Winter. Significantly greater production and attractive export prices buoyed hard red winter (HRW) exports year-over-year. Total 2019/20 HRW exports came in at 10.2 MMT (375 million bushels), 9 percent ahead of last year. According to USDA, higher yields due to cool, moist conditions during the 2019 growing season more than offset decreased planted area. HRW production increased 26 percent in 2019/20 to 22.7 MMT (834 million bushels). The average HRW export price in the first two months of MY 2019/20 fell 4 percent from the year prior to $233/MT. Increased exports to Mexico, the largest market for HRW, Taiwan, Indonesia, Brazil and Colombia more than offset reduced exports to Nigeria, Japan, Iraq and Egypt. Sales to Mexico totaled 2.61 MMT (95.9 million bushels), the highest on record and 22 percent more than last year. Sales to Nigeria, the second largest market for HRW, fell 11 percent from last year to 1.01 MMT (37.1 million bushels). HRW sales to China picked up in 2019/20 to 302,000 MT (11.1 million bushels) compared to the zero metric tons sold in 2018/19.
Hard Red Spring. Total hard red spring (HRS) commercial sales of 8.0 MMT (294 million bushels) were 12 percent greater than last year and 36 percent greater than the 5-year average of 1.45 MMT (53.3 million bushels). Exportable supplies were relatively stable year-over-year as higher beginning stocks in 2019/20 cushioned reduced production. Commercial sales to the Philippines, Japan, Taiwan, South Korea and Vietnam, the top five export markets for HRS, all outpaced 2018/19 sales. HRS sales to China for delivery in 2019/20 at 146,000 MT (5.36 million bushels) were more than 4 times greater than the quantity sold for delivery in 2018/19.
Soft Red Winter. Soft red winter (SRW) sales fell 27 percent on the year to 2.45 MMT (90.0 million bushels) as reduced exportable supplies supported export prices. USDA estimates 2019/20 SRW production fell 17 percent from last year to 6.50 MMT (239 million bushels). The average SRW export price for 2018/19 was $217/MT, but for almost the entire second half of the marketing year, SRW futures prices were higher than HRW futures. Exports to 8 out of the top 10 SRW markets fell below 2018/19. Sales to Mexico, the top market for SRW, fell 11 percent from last year to 815,000 MT (29.9 million bushels). Price sensitive buyer Egypt made no SRW purchases in MY 2019/20. Sales to Colombia, the fourth largest market for SRW, increased 11 percent year-over-year to 288,000 MT (10.6 million bushels).
White Wheat. Total commercial sales of soft white (SW) and hard white (HW) wheat of 5.37 MMT (197 million bushels) were slightly less than last year but still 14 percent ahead of the 5-year average of 4.69 MMT (172 million bushels). HW sales represent about 4 percent of the total. Sales to 3 of the top 5 white wheat markets fell below 2018/19. Sales to Japan, the second largest market for white wheat, fell 21 percent from last year to 701,000 MT (25.8 million bushels). Sales to the Philippines, the top market for white wheat, increased 14 percent from last year to 1.51 MMT (55.5 million bushels).
Durum. USDA reported 2019/20 durum sales at 965,000 MT (35.5 million bushels), nearly double last year’s figure and 70 percent greater than the 5-year average on significantly increased European Union (EU) imports. EU durum production fell 14 percent year-over-year on sharply lower harvested area, prompting greater imports from the United States. Italian imports of U.S. durum nearly tripled last year’s import volume at 672,000 MT (24.7 million bushels).
*Slight adjustments will be made when final commercial sales data is published on June 11.