WORLD AGRICULTURAL PRODUCTION PART 1:

February 1998

This report draws on information from USDA's global network of agricultural attaches and counselors, official statistics of foreign governments, other foreign source materials, and results

of office analysis. Estimates of U.S. acreage, yield and production are from the USDA Agricultural Statistics Board, except where noted. This report is based on unrounded data; numbers may not add to totals because of rounding. The report reflects official USDA estimates released in the World Agricultural Supply Estimates (WASDE-335) February 11, 1998.

The report was prepared by the Production Estimates and Crop Assessment Division, FAS, AGBOX 1045, 14th and Independence Ave., Washington, DC 20250-1000. Further information may be obtained by writing to the division, or by calling (202) 720-0888, 9516, or by FAX (202) 720-8880.

The next issue of World Agricultural Production, Part 1, will be available electronically after 3:30 pm local time on March 13, 1998.

WORLD AGRICULTURAL WEATHER HIGHLIGHTS

February 11, 1998

UNITED STATES: Strong Pacific storms pound the West Coast in early February. Some beneficial rain for winter grains fell in the southern Plains, but dryness extends into the fourth month in the northern Plains. Soaking rain inundates the Southeast and Atlantic Coast states, while heavy snow fell in the Ohio Valley. Unseasonably mild weather dominated much of the Nation.

SOUTH AMERICA: Ideal weather continued to benefit Argentina soybeans and corn. Wet weather possibly damaged sunflowers and rice. In southern Brazil, abundant rainfall favored soybeans in Rio Grande do Sul. Elsewhere, near normal December rainfall mostly offset above normal temperatures, but some stress to soybeans may have occurred.

EUROPE: Overwintering conditions were mostly favorable for winter grains through most areas. Unseasonably mild weather in early January was replaced by beneficial cooler weather that has persisted since late January. Near- to above normal precipitation in January in northern and eastern Europe boosts moisture supplies. Although welcomed drier weather prevailed over Portugal and southern Spain in January, wet weather recently returned to these areas.

FSU-WESTERN: Above-normal temperatures in January in western and southern areas provide favorable overwintering conditions for winter grains but kept most areas snow-free. Near- to above-normal precipitation in January boosted moisture supplies in Russia, the Baltics, and Belarus. Below-normal precipitation fell in Ukraine in January. A protective snow cover existed in those areas that experienced extreme cold.

NORTHWESTERN AFRICA: Recent soaking rain benefitted vegetative winter grains in Morocco. Persistent dryness in Algeria increased stress on crops, likely causing a decline in crop conditions. Below-normal precipitation in Tunisia in January lowered soil moisture reservoirs.

SOUTH AFRICA: Early January rains along with below normal January temperatures benefitted corn across the western corn belt of South Africa. During late-January and early-February, however, drier and warmer weather has stressed corn across the region. Timely rains in February are needed to maintain average yield potentials.

EASTERN ASIA: Winter wheat remained dormant across the North China Plain, despite above normal January temperatures. Above normal January rainfall favored winter grains and oilseeds in the Yangtze Valley and southern China.

SOUTHEAST ASIA: Across southern Sumatra and Java, adequate but below normal January rainfall favored main-season rice. Drought worsened across the northern Philippines. Above normal January rainfall favored oil palm across the Malay Peninsula.

AUSTRALIA: Below-normal January rainfall stressed eastern summer crops, but early February rains benefitted the crops. An active monsoon brought beneficial showers to the northeastern sugarcane region.

(More details are available in the Weekly Weather and Crop Bulletin. USDA/Joint Agricultural Weather Facility)

PRODUCTION HIGHLIGHTS FOR 1997/98

FEBRUARY 1998

WHEAT

COARSE GRAINS

WORLD RICE (MILLED BASIS)

OILSEEDS

PALM OIL

COTTON

INDICATIONS FOR 1998/99 FOREIGN COTTON AREA

Preliminary indications are that foreign cotton area in 1998/99 could range from 27.5 to 28.5 million hectares, compared with an estimated 28.4 million for 1997/98. Foreign cotton area for the 1998/99 season depends on several factors with cotton prices and those of competing crops playing a crucial role. Foreign cotton area is also influenced by domestic and world financial conditions, government policies, and weather. The Cotlook A-Index represents the price level of international raw cotton offered to the market on a daily basis from several cotton trading countries. Generally, a very strong direct relationship exists between cotton area and this price index for the previous year. During the first six months of 1997/98 marketing year, the index has dropped 12 cents. This factor alone suggests that foreign cotton area next year will drop below the 28.4 million hectares estimated for 1997/98. However, area shifts also depends upon the price level of other crops in relation to the price of cotton, production cost associated with cotton production, and government policies. A drop in area for 1998/99 is projected by U.S. agricultural attaches stationed in major cotton producing countries world-wide.