US wheat exports look set for a strong second half of the 2018/19 season when shipments from Russia are expected to slow, the chairman of the U.S. Department of Agriculture’s (USDA) World Agricultural Outlook Board said.
The USDA is forecasting U.S. wheat exports in the 2018/19 season will rise to 27.9 million tonnes, up from 24.52 million tonnes in the previous season.
“For us, the Russian export pace will slow, either priced out (of export markets) or because of a change in policy, so our exports will be weighted to the second half of the year,” the World Agricultural Outlook Board’s Seth Meyer said on the sidelines of a grains conference in London.
At the moment, however, U.S. wheat exports are trailing last season’s pace. Inspections in the 2018/19 season, which began on June 1, are standing at 7.82 million tonnes, down from 10.65 million in the same period last season.
“We’ve come under some fire for our (U.S.) export number being too high,” Meyer said, adding that the USDA’s estimates suggest that it would be impossible for Russia to maintain its current strong export pace.
The USDA expects the Russian wheat crop to total only 70 million tonnes this year, down from 85 million last season.
Russian wheat exports are running at a strong pace but the country’s agriculture safety watchdog has been beefing up quality controls in recent weeks.
In the past such moves have been used to place informal curbs on exports.
“They have been doing some business on what we would consider our turf … The thought is we will get some of our own turf back (in the second half of the season) that we’ve lost to this really strong export pace,” Meyer said.
Meyer added that China is expected to maintain soybean imports at 94 million tonnes in the 2018/19 season despite a trade dispute that has led to tariffs being imposed on U.S. supplies.
China has made a drastic reduction to its forecast for imports to 83.65 million tonnes, with an expected reduction in use of the bean in animal feed.
The world’s top importer has turned to Brazil for most of its soybean imports since tariffs were imposed, but the South American country does not have sufficient supplies to satisfy all Chinese demand.
“We expect they (China) will do some things like draw down stocks, try to diversify a bit, buy from us and pay the tariff on some product or they can buy for government stocks and not pay the tariff,” Meyer said.
“We think they will do all of these to try to minimise their exposure to buying U.S. beans. But at the moment our best guess is that they will still come to the market for about as many beans as they got last year.”