Wheat exporters have issues

Farm and Ranch December 14, 2010 Who has exportable supplies of wheat around the world? Helen Pound of Penson GHCO says its primarily the United States, Argentina and Australia. And Pound says all three countries have some issues regarding being able to export their wheat.

Pound: “In the United States we already have huge export programs that are tying up our export lifting capacity so it is difficult to increase the amount of export business we are doing because we have such a large corn, bean and wheat export program right now.”

Pound says in Argentina the government is only allowing exports a little at a time to keep their domestic economy from heating up. She says Australia has two sets of issues.

Pound: “One is the transition from the Wheat Board dominated export market to a more diverse number of companies that are trying to export. So their logistics system is not as smoothly running as it might normally be. Then on top of that you have a lot of quality deterioration in eastern Australia because of the amount of rain they have had lately.”

Pounds comments came after last week’s USDA’s supply and demand report for wheat, which raised both U.S. and world wheat ending stocks. She points out however, that most of world stocks are held by China and India and are not available to the market making the world stocks-to-use ratio of 22% tighter than it might appear to be.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.