The USDA's Wheat Outlook showed that world wheat trade in 2011/2012 is projected up 3.0 million tons this month to 141.8 million, just 1.1 million tons short of the 2008/2009 record. Record world production and stocks have stimulated trade.

There is also an increase in trade of low-quality wheat for feed use. Iran’s projected 2011/12 wheat imports are up 1.8 million tons this month to 2.0 million. Reports suggest Iran has been buying extensively from various countries in an effort to spread the risk of cancellation. Financial sanctions resulting from the country’s nuclear program are limiting its ability to pay for imports. And indeed some cargoes initially directed to Iran were diverted to such countries as Iraq, Yemen, Sudan, and Egypt.

Iran is reported to be negotiating grain purchases with Russia, Pakistan, and India using letters of credit denominated in rubles and rupees to bypass Western banking sanctions. Other countries that reported sales to Iran include Australia, EU-27, the United States, and Brazil.

Changes in wheat trade for many countries have been made this month. By this time of the year, there is sufficient trade data and information to update current forecasts based on the pace of shipments. Import prospects for South Korea in 2011/12 are up 0.3 million tons to a record of 5.0 million, reflecting its growing demand for feed quality wheat and its recent tenders (in large part white wheat from the U.S.).

Algeria has purchased wheat at a faster pace than expected, holding several tenders last month, and its 2011/12 imports are up 0.3 million tons this month to 6.4 million. Imports for Uzbekistan, Azerbaijan, and Georgia – all parts of the former Soviet Union – are also up based on increased flows from Kazakhstan. There are small pace-based increases this month in projected imports by Chile, Angola, Eritrea, Ghana, New Zealand, and Ukraine, which are partly offset by reductions in wheat imports by Syria and Mongolia.

The three biggest 2011/12 revisions in export prospects are for Australia, Brazil, and Kazakhstan. In Australia, higher exportable supplies and the pace of exports boost prospects by 0.5 million tons to 21.0 million. In Brazil, exports are also up 0.5 million tons to 1.5 million, tracking the pace of auction sales within its subsidized program, as well as its reported sales to Iran.

Kazakhstan’s wheat exports are up 0.5 million tons to 9.0 million, as the country managed to accelerate the pace of trade to about 1.2 million tons per month by subsidizing grain transportation to ports and improving the efficiency of rail car use. Exports are raised for Turkey and Serbia by 0.3 and 0.2 million tons, respectively, reflecting trade data. With a continuing stronger-than-expected pace for wheat sales and shipments, U.S. exports are projected 1.0 million tons higher to 26.5 million for the international July-June trade year.

Projected U.S. exports are up 25 million bushels to 1.0 billion for the June-May local marketing year. The United States continues to sell additional wheat, both hard and feed quality wheat (mainly white), to Asia (South Korea, Philippines, and China) and Mexico. With commitments (shipments plus outstanding sales) standing at 22.4 million tons as of March 1, down 25 percent on the year, U.S. wheat exports are on pace to reach the new forecast of 9.5 million tons, which is 26 percent lower than last year’s final results.