The pace of U.S. wheat export sales increased sharply in January with a narrowing of the price spread between U.S. and competing origins.

Given the steadfast advantages of quality, variety and reliability, the relative price of U.S. wheat today is certainly making it more attractive — and to more markets.

The many factors that contributed to the shift in world wheat prices seem likely to continue for the remainder of the marketing year.

The decision of the Russian government to lift its more than 10-month grain export embargo on July 1, 2011, ushered in strong competition to start the 2011/12 marketing year.

Then, estimates of world wheat supplies increased each month until hitting record-breaking world production, use and ending stock levels.

As a result, U.S. wheat prices have trended lower for nearly six consecutive months.

Despite declining prices, U.S. wheat remained more expensive than many other competitive suppliers, particularly Russia. In July 2011, Russian traders offered standard export grade #4 wheat at between $40 and $50 per metric ton below both French and U.S. soft wheat FOB values.

According to U.S. Wheat Associates (USW) Vice-President of Overseas Operations Vince Peterson, “Russian wheat prices were severely discounted as means of ‘buying back’ customer interest following their costly sales defaults of August 2010. That made their wheat temptingly cheap even for the buyers most hurt by the embargo.”