ANALYSIS – US wheat exports off to worst start since at least the 1980s

Demand for US wheat exports really is weak.

As measured by export commitments, ie the total of completed shipments and unfulfilled orders, the volume had reached 13.30m tonnes as of November 17, US Department of Agriculture data show.

That is, by more than 700,000 tonnes, the lowest on data going back to 1990.

It is in fact less than half the maximum headway for the date, as reported in 2007-08 – a year when demand was whetted by a world shortage which sent prices to record high, and drained US wheat stocks to what remains their lowest on data going back 60 years.

Asia looks south

Many Asian buyers, as well as Nigeria, seem to be particularly scaling back their purchases.

Commitments by the Philippines, at 1.68m tonnes, are down by 22% year on year, with China’s down 27% year on year at 616,200 tonnes – all shipped, with nothing left on the books.

This as Chinese buyers have been doling out orders for French wheat, and imported a record 4.97m tonnes from Australia during the first 10 months of this year.

On pace

However, all this does not mean that the USDA looks likely for now to cut its forecast for US wheat exports in 2022-23 from the current figure of 21.09m tonnes.

That is already the lowest since 1971-72. (The dataset for full-year exports goes back longer than the weekly data.)

And that meagre total does look achievable.

While the two datasets are not fully comparable, they do give an idea of where the US is at.

And the 63% progress that the US has achieved, in terms of commitments so far compared with the full-season export estimate, is bang in line with the trailing five-year average.

Import needs

Wheat may more concern investors is whether to achieve the export total, imports will exceed the 3.27m tonnes which the USDA has factored in.

That is not a particularly high bar, only marginally above the five-year average of 3.22m tonnes, and may face upward pressure if rumours of rare purchases from Europe are anything to go by.