WORLD COARSE GRAINS SITUATION AND OUTLOOK
After declining to about $110 per ton by early January, export quotes for U.S. corn (FOB, Gulf) rebounded with the release of revised USDA estimates for domestic corn use. Supported by this record use, prices reached $118 per ton in mid-January. However, the excellent development of Argentinas corn crop has combined with continued slow export sales to put steady downward pressure on corn prices throughout the second half of January and into February. Export values as of mid-February stand at about $113 for nearby shipment.
Forecast world trade in coarse grains was reduced 1.1 million tons this month, to 90 million tons. Estimated trade levels for both barley and corn were reduced, down 950,000 and 400,000 tons respectively. Estimated trade in sorghum was increased by 300,000 tons. Forecast world coarse grain consumption is unchanged this month, at 906 million tons. Coarse grains production in 1997/98 is expected to reach the second highest level on record, at 893 million tons (3 million tons higher than last month). Global ending stocks are forecast at 105 million tons, an increase of 2 million tons.
World trade in corn is now forecast at 64.3 million tons in 1997/98, down from 64.7 million tons last month. Estimated global corn production was increased this month to 579 million tons while consumption was raised to a record 595 million tons. Global corn stocks are forecast at 67.3 million tons.
Estimated world trade in barley was reduced this month to 15.7 million tons, down 950,000 tons from last months estimate. Global barley consumption is also estimated lower this month, down 1.0 million tons to 153 million.
The corn export forecast for the United States was reduced this month from 44.5 to 41.5 million tons. Export sales remain sluggish while crop and export prospects improve among competitors.
Argentina is now expected to export a record 12 million tons of corn in 1997/98. Nearly ideal growing conditions continue, with record yields expected and production forecast to reach 16.5 million tons. Argentina has traditionally carried minimal stocks, and it is expected that, once again, Argentine corn will be priced to ensure the sale of any surplus production.
The corn export forecast for China was increased this month from 4.0 to 5.0 million tons. While China has not been an active seller since October of last year, export shipments in recent months have been extremely heavy. These shipments and execution of outstanding contracts are expected to total five million tons by mid-spring.
Barley exports by the EU are now estimated at 5.0 million tons, down from 6.0 million last month. Weakening international demand for barley should severely limit barley shipments, as the EU was not an aggressive seller early in the year when prospects for strong import demand were better. Russia, however, did take advantage of strong demand early in the season, exporting almost one million tons from October through December, and is now forecast to export 1.5 million tons.
Barley imports by Saudi Arabia are now estimated at only 4.5 million tons, down from the previous estimate of 6.0 million tons. Abundant rains have resulted in outstanding production of local forage crops, allowing for increased grazing at the expense of imported feed barley.
South Africa is now expected to import 500,000 tons of corn this year. Localized drought continues to affect crops and total production is now estimated at 7.5 million tons, more than 1.5 million tons lower than the 1996/97 crop.
Estimates of corn imports by Mexico and Brazil were reduced by 500,000 tons each due to the slow pace of purchases to date.
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