U.S. Stands To Benefit From Russia’s Wheat Export Halt

The U.S. stands to gain a good share of the wheat export market that Russia is forfeiting due to the Russian government’s decision to halt grain exports until the end of the year, according to John Anderson, an economist with the American Farm Bureau Federation.

USDA recently released its August World Agricultural Supply and Demand Estimates (WASDE), in the report, USDA projected a huge drop in Russian wheat exports for the 2010-2011 marketing year: 3 million metric tons, compared to 18.5 million metric tons, in the 2009-2010 marketing year. Russia decided to exit the grain export market this year because of a serious drought that is reducing crop prospects.

“This is a jaw dropping reduction in exports for Russia,” Dr. Anderson said. “And because the United States is expecting a good wheat crop with good stock levels, our farmers stand to take up a big share of wheat exports that would have gone to Russia.”

U.S. all wheat production is estimated at 2.26 billion bushels, up 2% from the July forecast and up 2% from 2009, according to the WASDE report. USDA is also projecting the highest U.S. wheat yield ever at 46.9 bushels per acre, up 1 bushel per acre from July and up 2.5 bushels per acre from last year.

The U.S. stands to pick up export business because of expectations for a good crop and large wheat stocks, at just under 1 billion bushels.