Upgrades at Ports, More Exports of Corn
by Matthew Weaver
Investments in ports along the Columbia River to handle more corn and soybean exports will also benefit the wheat industry, a U.S. Wheat Associates official says. Grain companies are investing heavily in the Columbia River-Portland export market and want to compete in the growing world export market for corn and soybeans, U.S. Wheat Associates assistant director Shawn Campbell said.
Wheat exports will be a beneficiary of the upgrades, he said. As more corn and soybeans are exported, their prices will be bolstered, meaning that wheat prices will also be bolstered.
Campbell pointed to recent port upgrades, including the new EGT terminal at Longview, Wash. The region's export capacity of 21 million metric tons has increased to 31 million metric tons -- 48 percent, Campbell said.
"We haven't raised our exports by 48 percent, which means we have a lot of empty loading capacity in the PNW that needs to be used up," he said.
Most growth on the global wheat market will be in southeast Asia and Latin America, he said.
The United States has overcome a geographic disadvantage, with the majority of exports going to countries where it wouldn't be the nearest seller. Most competitors rely primarily on close-by customers for a majority of their market share, he said.
Wheat specifications have become more complicated in the last 15 years, and Campbell expects that to continue.
"However, this isn't something we should frown upon," he said. "Even though this might result in a few more discounts here and there, a more complicated market favors the U.S., which is better suited to meet new specs compared to all of our competitors."
With the end of the Canadian Wheat Board monopoly, more Canadian grain will likely move through Portland, he said.
The end of the monopoly will likely mean the Canadian and U.S. wheat markets have larger impacts on each other, with competition based on direct relative value rather than price discounts.
U.S. Wheat has already seen a slight increase in Canadian grain through Portland, although there's currently no way to track Canadian wheat past the border, Campbell said.
"The only reason we know any moves at all is rumors and sources within the grain industry," he said. "Nobody knows the exact number, but the feeling is there's a little more than usual."
Campbell spoke during an Idaho Wheat Commission webinar.
Idaho Wheat Commission: www.idahowheat.org
U.S. Wheat: www.uswheat.org
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