07/28/08 Iran buys U.S. wheat

Farm and Ranch July 28, 2008 The most recent weekly export sales report for wheat from the USDA contained a rather historic development. Sowers: "We saw 65-thousand metric of hard red winter sold to Iran and it was the first sale of wheat to that country from the U.S. since 1981. That is Joe Sowers, market analyst with U.S. Wheat Associates. Iran stopped buying wheat from the U.S. following the Iranian Revolution and the U.S. even had sanctions against exports there until the late 1990s. In the days of the Shah Iran was a major export market for Pacific Northwest soft white wheat growers but now when they need imports they buy hard wheats. And Sowers says Iran needs five million metric tons of imports this year because of drought. But why U.S. wheat now and not say Black Sea wheat? Sowers: "The Black Sea is supplying all they can and the rest of that region also had a bad drought. Syria is in the worst drought in a decade. Iraq is not looking very good. So the Black Sea has its hands in all those pies, including Egypt and Syria so their export capacity is generally maxed out. So Iran had to come to the U.S. and source hard red winter." Quality may be a factor too. Sowers says some traders are optimistic we'll continue to see Iranian demand for U.S. wheat into the fall. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.