U.S. wheat is still flying off the shelves, with lower prices encouraging end users to stock up on deals. Net new bookings for wheat came in at 26.7 million bushels this week, up from last week and trade estimates. In fact, the total for the latest week almost doubled the rate needed the rest of the marketing year to meet USDA's forecast for the 2013 crop.
Still, the buyers for grain demonstrated both the promise and pitfalls of the wheat business this summer. Buyers with plenty of cash continue to prefer U.S. quality. But other end users, including those in North Africa and the Middle East, are still shunning U.S. originations, stocking up on lower priced grain from our competitors – and there are plenty of them.
Leading wheat buyers this week are all either established industrialized counties or emerging economies. Brazil was the leading buyer, booking 6.2 million bushels. The South American country has turned to U.S. hard red winter wheat to replace supplies that aren't available from Argentina, where production is down. The Brazilian economy is suffering its share of problems, but remains one of the emerging markets of the world. Other leading buyers of U.S. wheat in the latest week were Japan, Taiwan and China.
Absent from the list were countries around the Mediterranean, who are booking supplies from the Black Sea, Australia and Canada. U.S. soft red winter wheat delivered from the Gulf to Egypt costs around 75 cents more a bushel than Ukraine wheat, for example.
In the soybean trade, action remains focused on new crop, with China and unknown destinations heavy buyers that swelled the total in the latest week to 40.3 million bushels. Old crop accounted for only 2.9 million bushels. USDA also announced additional new crop sales totaling 12.1 million bushels to China Tuesday and Wednesday, but made no announcements today under its daily reporting system for large purchases.
Corn sales were below estimates at 20.1 million bushels, but old crop business was surprisingly strong, accounting for 11.4 million bushels of the total. Japan, which was a heavy buyer of feed wheat and non-U.S. corn earlier, is back in at these lower price levels.