TOKYO -- Russia is on track to be the world's leading wheat exporter in the 2015-16 crop year according to the U.S. Department of Agriculture's latest World Agricultural Supply and Demand Estimates report.
The report, which estimates wheat crops for the year from June 2015 through May 2016, estimates that Russia will export 23.5 million tons of wheat, the first time that country has been the world's leading exporter since such statistics began to be compiled by country in the 1990s. Its market share is projected at 14.5%, 0.6-point higher than the prior crop year. Canada, last crop year's leading wheat exporter, is expected to drop to third behind the U.S., which is also expected to see a smaller market share.
In addition, Brazil is projected to become the world's leading soybean exporter in the crop year running from September 2015 through August 2016. It is seen exporting 57 million tons, compared with 45.99 million tons for the U.S. This will mark the fourth straight year that Brazil has been the largest exporter. The U.S. continues to be the largest exporter of corn.
Growth in harvests outside North America is the leading factor in market share changes. Russia's wheat harvest is now projected at 61 million tons for 2015-16, up 3% from the prior year, because Russian farmers have planted a wider acreage as a result of high futures prices of $5 to $6 a bushel on the Chicago market. New farmland is being developed in Brazil, which is projected to harvest upwards of 100 million tons of soybeans in 2015-16.
Foreign exchange markets are also playing a role. The Russian and Brazilian currencies have lost value versus the dollar, making Russian wheat cheaper in dollar terms than U.S. wheat. This has prompted major players in the world grain markets to buy Russian wheat for export to Egypt and the Middle East.
Cheap grain exports from countries outside North America have weakened international markets. Chicago wheat prices closed at around $4.80 a bushel on Tuesday, up 3% from Monday but down around 10% from a year earlier. The slowing Chinese economy is also undercutting growth in demand for feeds, dragging the market lower.