OREANDA-NEWS. February 18, 2015. US wheat exports are down about 30 percent from last year and prospects for business picking up look bleak given the strong dollar and ample supplies overseas, traders and analysts say.

Exporters had hoped slow sales would improve in February and March when competitors like Russia, Ukraine and France usually start running out of wheat. But that hasn't happened this season.

The biggest culprit is the strong dollar, which hurts wheat more than any other U.S. grain crop since it is grown widely throughout the world. But two years of big world wheat crops, especially new Black Sea exporters, have also hurt U.S. sales.

"The problem with U.S. wheat is that anything priced in dollars is more expensive," said Roy Huckabay, grain analyst with The Linn Group in Chicago. "The dollar has been really strong and I don't see it changing its stripes."

The U.S. Department of Agriculture last week cut its forecast for U.S. wheat exports in the marketing year ending in June by 25 million bushels.

By contrast, Europe - led by France and buoyed by the weak euro - was projected to see near-record exports.

"The best opportunity for recovery is if Europe starts to have a quality issue," said Shawn McCambridge, an analyst with Jefferies Bache who noted that China has been buying higher protein U.S. wheat from time to time to blend at flour mills.

For now, exporters say, the world's biggest importers - Egypt, Jordan, Saudi Arabia - are covered through at least mid-March after a series of big tenders prompted by a 15 percent slide in world wheat prices in January.

"It's hard to be too optimistic," said one U.S. wheat exporter, citing an outlook for higher U.S. interest rates - and thus dollar - in 2105.

Earlier this winter there was some concern about the Black Sea region being too dry as winter wheat went into dormancy.

Russia is also now trying to curtail or slow exports - now number three behind the U.S. and Canada - to ease food inflation.

But analysts say Europe and the Black Sea will remain aggressive sellers in 2015.

"Russian wheat farmers are seeing record high wheat prices, as are Ukraine farmers. The Australian dollar has cratered and now the Canadian dollar has fallen," said Dan Basse, head of Chicago consultancy AgResource. "So the incentive is there for world wheat farmers to plant more wheat acres."