Wheat buyers are purchasing cargoes further ahead to ensure that they receive supplies of the staple as prices climb, according to U.S. Wheat Associates Inc., a trade group for the world’s largest exporter. U.S. exports may advance in 2010-2011 after Russia halted exports and buyers increased purchases, said Steven Wirsching, director at the group’s west coast office in Portland. Africa, led by Nigeria, will show strong growth and that nation may become the top buyer, displacing Japan, he said in an interview. Wheat has climbed about 43 percent since the end of June as global supplies declined on adverse weather. Russia’s worst drought in at least 50 years prompted the government to ban exports in August through to next July 1, driving prices higher and forcing importers to seek alternative supplies. One reason that demand for U.S. wheat shipments is climbing “is reduced supplies from the Black Sea region, primarily from Russia,” Wirsching said in Seoul yesterday. “Secondarily, as prices rise, buyers start to buy it further ahead, so they will be assured of getting wheat supplies.” Wheat for March delivery climbed as much as 1.2 percent to $6.9275 a bushel on the Chicago Board of Trade today after Egypt ordered 175,000 tons of U.S. wheat yesterday. The most-active contract, which traded at $6.90 at 9:28 a.m. in London, surged to $8.68 on Aug. 6 after the Russian export ban was announced. Boosting Demand Russia’s absence from the market and low corn supplies were likely to continue boosting demand for U.S. wheat, said Wayne Gordon, an analyst at Rabobank Groep NV. “My suspicion is that this will be very much the story right up until we get to see what the winter-wheat harvest looks like in the U.S.,” he said. The world wheat harvest may shrink 5.1 percent to 647.7 million metric tons this crop year, the lowest level in three years, after the Russian drought, the United Nations’ Food and Agricultural Organization said in a report on Nov. 17. Global usage may climb 1.2 percent to a record 668 million tons, while stockpiles will slide 9.9 percent to 180.9 million tons at the end of this season, the agency said. There may be “harder times ahead unless production of major food crops increases significantly in 2011,” the FAO said in the report. The Russian withdrawal from the international market has offered a chance for rivals to increase exports. AWB Ltd., Australia’s largest exporter, reported in September that there was “very strong interest” in the nation’s wheat. ‘Russian Situation’ U.S. Secretary of Agriculture Tom Vilsack said in August that “other countries, including the U.S.” would help the world avoid a global wheat shortage. The U.S., Canada and the European Union will “be able to deal with the difficulties the Russian situation has created,” Vilsack said then. U.S. exporters sold 943,444 tons of wheat in the week to Nov. 11 compared with 831,989 tons sold a week earlier, the U.S. Department of Agriculture said yesterday. That takes outstanding sales to 8.44 million tons in the marketing year that began June 1 compared with 3.97 million tons a year ago, it said. Russia may restart grain shipments in the 2011-2012 season, potentially exporting 15 million tons if the harvest totals 80 million tons, Grain Union President Arkady Zlochevsky said in an interview yesterday. “The markets that are really growing are located in Africa,” Wirsching said after a seminar with South Korean clients. Nigeria has a reason to claim the number-one spot as the largest single buyer of U.S. wheat, ahead of Japan, he said. Japan is currently the top export market for the U.S. grain, followed by Nigeria, Mexico, Egypt, the Philippines and South Korea, according to Wirsching. Nigeria’s “per capita income is growing and they are consuming more food and they are looking for more Western-style food products,” he said. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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