Demand for U.S. wheat remains aggressive despite elevated prices in comparison to world values. While the industry continues to anticipate a large global wheat crop, there remains some concern about quality. It appears as if a significant portion of the crop could be shifted into feed wheat. Therefore, demand for quality wheat should remain strong and help boost U.S. exports.
U.S. soybean export demand experienced a significant increase during late May and into early June. This was correlated to the situation in South America that resulted in no soybean exports for a significant length of time while farmers and the government hashed out an agreement on export tax. As a result, a large portion of export business was shifted to the U.S. and sales continue to outpace the projected 2008/2009 levels.
In comparison to the other commodities, corn export sales are lagging. However, sales continue to fractionally outpace projections, but if we do not see a pick-up in demand during the winter months, they have the possibility of slipping below expectations. One of the factors could be that corn is competing with wheat for a feed alternative, as wheat is becoming a more attractive option while corn values remain elevated.