Early U.S. commercial wheat sales in marketing year 2013/14 are off to a fast start on the heels of strong sales momentum in the second half of 2012/13.

After a slow start in 2012/13 due to less competitive prices, the sales pace increased as competitor supplies tightened in early 2013. As of June 20, U.S. commercial sales for 2013/14 currently stand at 8.57 million metric tons (MMT), 28 percent ahead of last year.

The fast start is not stopping the U.S. Department of Agriculture (USDA) from projecting that total U.S. exports will fall 4 percent from 2012/13 to 26.5 MMT, 7 percent below the five-year average. 

As the first major exporter to harvest a new crop, U.S. supplies are in especially high demand when world supply is tight. However, USDA expects every other major wheat producing country to boost wheat supplies this year, which could, depending on the price relationships, slow the pace of U.S. sales.

2013/14 hard red winter (HRW) sales of 2.71 MMT are 13 percent ahead of last year. Strong sales to South America have more than offset a slightly lower purchase pace this year by Nigeria and Mexico.

A short Argentine crop is helping lift HRW sales to Brazil, Peru and Chile. Being unable to procure adequate supplies from Argentina, Brazil temporarily lifted its non-Mercosur import duty from April 1 to July 31, 2013.

Shipment of HRW significantly increased the last two months of the 2012/13 marketing year. Sales for 2013/14 have already surpassed total U.S. wheat purchases from last year of 510,000 MT and the five-year average of 319,000 MT.