US soft red winter wheat may attract buyers

US soft red winter wheat (SRW) exports are likely to increase because of the crop's price competitiveness on the world stage.

Demand for SRW has been relatively low recently, and US farmers have not been especially active in the market. But those dynamics may soon change.

Argus assessed US Gulf coast SRW at $213.85/t on 1 August, making it the cheapest milling wheat globally behind Ukraine's milling wheat at $212.50.

Buyers interested in US SRW would likely come from the same destinations that have bought the product the past.

Nigeria was a consistent buyer of SRW, averaging 341,000t prior to the 2019-20 marketing year, according to the US Department of Agriculture (USDA). Nigerian purchases have sunk to 65,000 t/yr on average since that marketing year, but with favorable SRW economics Nigerian buyers may be enticed to purchase again.

Brazil could increase purchases of US SRW as well. Brazil has shifted to Black Sea and US origin milling wheat recently because of favorable pricing, according to market participants.

The top five destinations for US SRW have accounted for 66pc of the crop's exports on average over the past seven years, according to the USDA. The buyers have historically been in the Western hemisphere, with a few exceptions.

For the 2024-25 marketing year, USDA is forecasting SRW exports of 3mn t, down from 4.3mn t a year prior.

By Eduardo Gonzalez