by Ann Courtmanche, U.S. Wheat Associates market analyst

Total U.S. wheat export sales are down just five percent from last year to a total of 19 million metric tons (MMT), according to today's USDA export sale report. Export sales had been running ahead of last year, until late November. If USDA projections of total U.S. wheat exports of 27.2 MMT hold true, then sales will run below last year's throughout the rest of the marketing year.

While export sales overall are only slightly lower than last year, the 2004/05 marketing year changes are quite dramatic on a class basis.

For example, export year-to-date sales of hard red spring (HRS) are up 23 percent from last year to 5.7 MMT, in part due to purchases of 897 thousand metric tons (TMT) by China. This year, China has shifted its U.S. wheat purchases to high-protein spring wheat to blend with its own wheat. HRS sales are up worldwide due to reduced quality from other high-protein wheat producing countries, mainly Canada. HRS sales are up to Asia with a 116 percent increase in sales to the Philippines over last year.

Strong sales are also reported thus far for U.S. white wheat, with year-to-date export sales of 3.7 MMT, up 12 percent from last year. The increase is due in part to China's new purchases of this class of wheat. Purchases have gone from roughly 30 TMT in 1999 and 2002, to 153 TMT in 2003/04, to more than doubling that amount this year with purchases of 388 TMT. Pakistan also returned to the U.S. market with year-to-date sales of 373 TMT.

Total sales of durum (416 TMT) and hard red winter (6.5 MMT) are 45 percent and 24 percent below last year's year-to-date sales respectively. Lower durum sales to Venezuela account for some of this change. "It is more a reflection of larger than normal purchases in marketing year 2003/04," states USW regional vice president Mitch Skalicky, "Venezuelan millers had increased their purchases in anticipation of possible logistical problems stemming from the country's referendum last August." With a larger durum crop in the EU, it is no surprise that durum sales are also down to Italy -- although, with disappointing quality in Italy's durum crop, there is a potential for more U.S. durum exports.

U.S. wheat year-to-date sales of hard red winter (HRW) wheat are 6.5 MMT, down 24 percent from last year this time. While HRW year-to-date sales are higher to many key markets like Mexico, Central America and North Asia, sales to Egypt are 80 percent below last year. The drop is due to increased competition from Russia and, most recently, Argentina. Sales to Venezuela this year are half of what they were a year ago, due to increased competition from Canada, which is pricing its spring wheat at HRW values in selected markets. As well, HRW year-to-date sales to Brazil have dropped off, as their own supplies remained steady and imports from Argentina are strong.