EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• The forecast of U.S. corn exports was cut 3.0 million tons this month, to 41.5 million, as estimates of exports by both Argentina and China were raised.

• The 1998 rice import forecast for Indonesia was increased to 3 million tons as continued drought is expected to lower 1997/98 production.

• The wheat export forecasts for Canada and Kazakhstan were raised 500,000 tons each due to aggressive export programs during the first half of the marketing year.

• Estimated barley imports by Saudi Arabia were reduced this month from 6.0 to 4.5 million tons due to strong domestic production of forage crops.

• The estimate of EU barley exports was cut by 1 million tons, to 5.0 million, because of strong Russian exports and weaker demand.

• Thailand’s 1998 rice export forecast was increased 300,000 tons as favorable conditions have improved production expectations. Thai exports are now expected to reach 5.8 million tons.

• Wheat import forecast for Russia was raised 700,000 based on strong import pace to date.

• Algeria and Libya wheat import forecasts were raised 500,000 and 250,000 tons respectively, due to higher consumption needs.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• The USDA’s GSM-102 program is playing an increasing role in financially-weakened Asia.

• Mexico’s new import procedures for dry beans should aid U.S. exports to that big market.

• The United States seems well positioned to compete for Colombia’s rice market.

• The lifting of Nigeria’s ban on barley and barley malt imports opens opportunity for U.S. trade.

• The Canadian Wheat Board seems to be flexing its muscles in Peru.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1997/98 is projected at 98.2 million tons, .5 million tons higher than the 1996/97 level. While world production is forecast to reach a record 609 million tons, the most significant increases occurred in countries that currently have a minimal impact on trade, mainly China and the former Soviet Union. Total export availability in Argentina, Australia, Canada, and the European Union is forecast down 12 million tons from the previous year, however, the 6.6 million ton increase in the U.S. crop partially offsets this loss. Global production will exceed consumption for the second year in a row, and prospective increase in global ending stocks, up 24 million tons, will enable the global stocks-to-use ratio to recover from the past three years.

RICE

Global rice trade in calendar year 1998 is projected at 20.1 million tons, a 1.3 million ton increase over the estimated 1997 level, and the second highest level on record. The high level of trade is fueled by record world production and strong demand in Southeast Asia, particularly Indonesia. International supplies should be sufficient to meet this additional demand, as overall world production (rough basis) is forecast at 566 million tons, a 5.1 million ton increase over last year. Record crops are forecast for China and India, and the world’s largest exporter, Thailand, is forecast to increase production by nearly 1 million tons. In addition to increasing availability for export, the strong production forecast also translates into an expected 2.5 million ton increase in world stocks.

COARSE GRAINS

World trade in coarse grains is estimated at 90 million tons this month, down 1.1 million tons from the previous estimate. Among exporters, however, significant changes were made in estimated market share in both the corn and barley markets. U.S. coarse grains exports are estimated at 47.9 million tons, 3.2 million tons lower than last month’s estimate. Overall coarse grains exports by Argentina are now expected to reach a record 13.3 million tons, 1.8 million tons higher than last month. For barley, the estimate of EU exports was reduced 1 million tons (to 5.0 million), while Russian exports are now estimated at 1.5 million tons, up from 1.0 million. Global coarse grains consumption is unchanged at 906 million tons, while world ending stocks are forecast at 105 million tons, up two million tons from the previous forecast.

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Last modified: Thursday, November 13, 2003