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					World and U.S Wheat Markets:
        An Overview

               Dr. Vincent H. Smith
Department of Agricultural Economics and Economics
             Montana State University
       Follow the Grain: February 28, 2008
                Outline
• A Long Run Perspective on World Wheat
  Markets
• The Changing Structure of World Wheat
  Markets
• Competitors and Customers in Export
  Markets
            World Production, Consumption, Trade and Year End
                         Stocks: 1960/61 -2003/04

      700


      600

      500


      400
MMT




      300


      200

      100


       0
       1960/61 1964/65 1968/69 1972/73 1976/77 1980/81 1984/85 1988/89 1992/93 1996/97 2000/01
                                                 Marketing Year


                                Production     Consumption        Trade 1/   stocks 2/
                           $ per bushel
19
  59




                                10
                                      12
                                           14
                                                16
                                                     18
                                                          20




           0
               2
                   4
                       6
                           8
     /
19 60
  61
     /
19 62
  63
     /6
19 4
  65
     /
19 66
  67
     /
19 68
  69
     /
19 70
  71
     /
19 72
  73
     /
19 74
  75
     /
19 76
  77
     /
19 78
  79
     /
19 80
  81
     /8
19 2
  83
     /
19 84
  85
     /
19 86
  87
     /
19 88
  89
     /
19 90
  91
     /
19 92
  93
     /
19 94
  95
     /
19 96
  97
     /
19 98
  99
     /
                                                               U.S. Average Real Price of Wheat: 1960-2008 (in 2008 prices)




20 00
  01
     /0
20 2
  03
     /
20 04
  05
     /
20 06
  07
     /0
       8
     World Wheat Market Structure


1. Production is spread over many countries
2. World Exports Concentrated among the “Big
   Five” (Argentina, Australia, Canada, European
   Union, United States) plus India.
3. World imports are spread among many
   countries.
Country Shares of World Wheat Production 2004-2005 (total 615 mmt)
                                     Argentina, 2.4%
                                         Australia, 3.6%
                                            Brazil, 0.9%
                      ROW, 19.8%               Canada, 3.9%



                                                       China, 14.6%



       United States, 9.5%



                                                       India, 11.7%



                      EU-25, 21.8%
                                           FSU, 11.7%
          Export Market Shares in 2003-2004 Marketing Year
                  (Total World Exports = 105 mmt)
                       ROW, 10.4%        Argentina, 7.0%



                                                           Australia, 14.3%




United States, 30.5%
                                                                Canada, 14.7%




                                                       India, 4.7%

                          EU-25, 10.3%         FSU, 8.0%
Import Market Shares in 2003-04
   (total imports = 107 mmt)

                  Algeria
                          Brazil
                    4%
                           5% China
                                 8%

                                      Egypt
                                       7%
ROW
                                       Indonesia
44%
                                          4%
                                       Iraq
                                        3%
                                      Japan
                                       5%
                                  Korea, South
                                       4%
         EU-25                 Morocco    Mexico
          5%                     2%         4%
                 Philippines     Nigeria
                     3%            2%
Country Specific Trends
  1.   United States
  2.   Canada
  3.   European Union
  4.   Australia
  5.   Argentina
  6.   India
  7.   China
  8.   Former Soviet Union
                Wheat Production, Consumption, Exports and Stocks:
                          United States, 1996/07-2003-04

      80.0

      70.0

      60.0

      50.0
MMT




      40.0

      30.0

      20.0

      10.0

       0.0
             1996/97   1997/98    1998/99    1999/2000    2000/2001    2001/2002   2002/2003   2003/2004
                                                Marketing Year

                            Production      Consumption      Exports       Year End Stocks
                                 U.S. Wheat Production by Class: 1995-2003 Crop Years
                      1400



                      1200                                              HRW, 4
                                                           HRW, 3
                                                                                         HRW, 5                                                  HRW, 9
                      1000
Millions of bushels




                                 HRW, 1                                                                HRW, 6
                       800
                                              HRW, 2                                                                   HRW, 7

                                              HRS                                                                                   HRW, 8
                       600

                                                           HRS          HRS                            HRS                                       HRS
                                 HRS
                                 SRW                       SRW                                         SRW             HRS
                                                                        SRW              SRW
                                                                                         HRS
                       400                    SRW                                                                      SRW                       SRW
                                              White        White                                                                    HRS
                                 White                                                                                              SRW
                                                                        White                          White                                     White
                                                                                         White                         White        White
                       200
                                              Durum                     Durum
                                 Durum                     Durum                         Durum         Durum                                     Durum
                                                                                                                       Durum        Durum
                         0
                             1            2            3            4                5             6               7            8            9
                                                                                 Crop Year

                                                             HRW        HRS         Durum         SRW          White
               Wheat Production, Consumption, Exports and Stocks:
                            Canada, 1995/96-2003/04

      35,000



      30,000



      25,000



      20,000
MMT




      15,000



      10,000



       5,000



          0
               1    2   3    4           5      6          7         8    9       10        11   12   13
                                                    Marketing Year

                            Production       Consumption        Exports   Year End Stocks
                Wheat Production, Consumption, Exports and Stocks: European
                                   Union, 1995/95-2003/04
      160,000

      140,000

      120,000

      100,000
MMT




       80,000

       60,000

       40,000

       20,000

           0
                   1995/96

                             1996/97

                                       1997/98

                                                 1998/99

                                                           1999/2000

                                                                        2000/01

                                                                                  2001/02

                                                                                            2002/03

                                                                                                       2003/04

                                                                                                                 2004/05

                                                                                                                           2005/06

                                                                                                                                     2006/07

                                                                                                                                               200708
                                                                        Marketing Year

                                       Production                      Consumption                    Exports              Stocks
               Wheat Production, Consumption and Year End Stocks:
                           Australia, 1995/96-2003/04

      30,000




      25,000




      20,000
MMT




      15,000




      10,000




       5,000




          0
                              1970/71     1971/72      1972/73       1973/74    1974/75         1975/76
                                                    Marketing Year


                             Production     Consumption          Exports       Year End Stock
                       Wheat Production, Conusmption, Imports and
                             Stocks: China, 1995/96-2003/04
      140,000



      120,000



      100,000



       80,000
MMT




       60,000



       40,000



       20,000



           0
                       6



                                  7


                                             8


                                                        9




                                                                                1


                                                                                           2



                                                                                                      3


                                                                                                                 3


                                                                                                                            4



                                                                                                                                       5


                                                                                                                                                  6


                                                                                                                                                             7



                                                                                                                                                                        8
                                                                     0
                     /9



                                /9


                                           /9


                                                      /9




                                                                              /0


                                                                                         /0



                                                                                                    /0


                                                                                                               /0


                                                                                                                          /0



                                                                                                                                     /0


                                                                                                                                                /0


                                                                                                                                                           /0



                                                                                                                                                                      /0
                                                                   00
                  95



                             96


                                        97


                                                   98




                                                                           00


                                                                                      01



                                                                                                 02


                                                                                                            02


                                                                                                                       03



                                                                                                                                  04


                                                                                                                                             05


                                                                                                                                                        06



                                                                                                                                                                   07
                                                                 /2
                19



                           19


                                      19


                                                 19




                                                                         20


                                                                                    20



                                                                                               20


                                                                                                          20


                                                                                                                     20



                                                                                                                                20


                                                                                                                                           20


                                                                                                                                                      20



                                                                                                                                                                 20
                                                              99
                                                            19




                                                                                        Marketing Year

                                                            Production          Consumption               Imports         Year End Stocks
                        Wheat Production, Consumption, Exports and Stocks:
                               Former Soviet Union, 1995/96-2003/04

      120,000



      100,000



       80,000
MMT




       60,000



       40,000



       20,000



           0
                   6


                            7


                                     8


                                              9




                                                                 1


                                                                          2


                                                                                   3


                                                                                            4


                                                                                                      5


                                                                                                               6


                                                                                                                        7


                                                                                                                                  8
                                                        0
                /9


                         /9


                                  /9


                                           /9




                                                              /0


                                                                       /0


                                                                                /0


                                                                                         /0


                                                                                                   /0


                                                                                                            /0


                                                                                                                     /0


                                                                                                                               /0
                                                     00
             95


                         96


                                  97


                                           98




                                                              00


                                                                       01


                                                                                02


                                                                                         03


                                                                                                  04


                                                                                                            05


                                                                                                                     06


                                                                                                                              07
                                                  /2
           19


                       19


                                19


                                         19




                                                            20


                                                                     20


                                                                              20


                                                                                       20


                                                                                                20


                                                                                                          20


                                                                                                                   20


                                                                                                                            20
                                                  99
                                                19




                                                                              Marketing Year

                                                  Production          Consumption             Year End Stocks        Imports
             Wheat Market Basics


1. World production drives average world prices
2. World production was low in 2006/07, but projected
   to be somewhat higher in 2007/08. World stocks are
   currently VERY small.
3. U.S. production was quite low in 2006/07 and is
   projected to increase in 2007/08. Stocks are LOW.
3. Prices have shot up considerably, particularly for old
   crop wheat.
World Wheat Production and Average U.S.
        Prices: 1990/91-2003/4
 5                                                                                                                      620


4.5
                                                                                                                        600

 4
                                                                                                                        580
3.5

                                                                                                                        560
 3


2.5                                                                                                                     540


 2
                                                                                                                        520

1.5
                                                                                                                        500
 1

                                                                                                                        480
0.5


 0                                                                                                                      460
      1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04

                                           U.S. Average Price       World Wheat Production, mmt
Questions????

      Questions????
    Questions!!


      Questions????

				
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