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Economic and dam related articles

World Demand Grows
for Soft White Wheat

by Matthew Weaver
Capital Press, September 28, 2020

The Philippines, South Korea, Japan, Indonesia and Taiwan on average account for about 70% of soft white wheat exports.

The Columbia River System, which includes the Snake River linking to Lewiston, Idaho, is a critical navigation system for shipping wheat downriver to Portland and export markets. (Tidewater photo) Soft white wheat sales are up 26% compared to the same time last year, said Mike Spier, vice president of overseas operations for U.S. Wheat Associates, the overseas marketing arm for the industry.

Last year's sales at the same time were 2.1 million metric tons. This year, sales are 2.7 million metric tons, about 56% of USDA projections for the entire marketing year.

Soft white wheat is the variety primarily grown by Pacific Northwest farmers.

Spier spoke to the Washington Grain Commission board meeting Sept. 24, held virtually due to the COVID-19 pandemic.

Soft white is a class of wheat used for cookies, crackers, pastries and sponge cake. It accounts for roughly 80% of the wheat grown in Washington, 70% in Idaho and 97% in Oregon.

About 85% of Washington's crop, 95% of Oregon's crop, and all of northern Idaho's crop — about 60% of the state's total — are exported, according to U.S. Wheat Associates.

Randy Fortenbery, small grains economist for Washington State University, doesn't see much room for soft white prices to move up unless there's more damage to the corn crop than currently projected. Corn prices typically drive most grain prices. Soft white wheat prices are currently $5.65 to $5.70 per bushel.

Current USDA projections call for the marketing year's white wheat exports to be down compared to a year ago, Fortenbery said.

If the export picture improves, it would be positive for prices, but the market will wait to confirm that, he said.

He said he plans to watch exports in October, November and December to get a sense of whether USDA projections were overly cautious.

"The next couple of months will be really critical in terms of the export pace," Fortenbery said.

The sales pace is higher this marketing year compared to last year, and is also up over the five-year average, Spier said.

Total commercial wheat sales are already 49% of USDA's projected 26.5 million metric tons, Spier said. Hard red winter wheat sales are up 6% from last year, hard red spring wheat is up 13%. Total wheat sales are up 7% from last year.

Exports to the Philippines are at 1.9 million metric tons, up 36% from 1.4 million tons the previous year.

Buyers in the Philippines likely expected increased purchases of soybeans, corn, sorghum and wheat from China, and the resulting tighter export capacity, so they increased their pace earlier, Spier said.

China is in the No. 2 spot, with 1.5 million metric tons, up 2,357% from 60,000 metric tons the previous year.

Japan, South Korea and Taiwan are on the same pace as last year.

Most flour mills in those countries and the Philippines have already purchased their requirements through to the end of the year, Spier said.

The Philippines, South Korea, Japan, Indonesia and Taiwan on average account for about 70% of soft white wheat exports.

Matthew Weaver
World Demand Grows for Soft White Wheat
Capital Press, September 28, 2020

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