WORLD COARSE GRAINS SITUATION AND OUTLOOK
Mid-March export quotes for U.S. corn (FOB Gulf) of $118 per ton came under assault in the second half of the month as exporters began to aggressively market new crop Argentine corn. Prices had fallen to $110 per ton by the time USDA released its March 31 stocks report. That report, which indicated lower than expected second-quarter use, put additional pressure on prices, and by the end of the first week of April, export quotes had softened to $106 per ton.
Forecast world trade in coarse grains was reduced 1.5 million tons this month, while estimated consumption was lowered 4 million tons and forecast ending stocks increased 9 million tons. The outlook for oats, rye and sorghum is little changed. However, the corn market continue to soften, with southern hemisphere harvests bolstering exportable supplies, lowering prices and reducing export prospects for the United States. Likewise, after a strong start, world barley demand continues to fade, further reducing export prospects for the EU.
World trade in corn is forecast at 62.9 million tons in 1997/98, down 1.3 million tons from last month, with U.S. exports forecast to fall 2.5 million (to 39 million tons). Estimated world consumption was reduced 3.8 million tons.
Estimated world barley trade was dropped to 14.4 million tons, down 500,000 tons from last months estimate. Global barley consumption is estimated 500,000 tons lower this month, at 150 million tons, while global ending stocks are forecast at 29.8 million tons, a year-to-year increase of 5.5 million tons.
The estimate of world trade in sorghum was increased this month, from 6.6 to 6.8 million tons. World trade in oats is also expected to increase slightly, from 2.2 to 2.3 million tons.
Estimated corn exports by the United States were slashed 2.5 million tons this month, to 39 million tons. U.S. exports have been limited both by weakening international demand and increased competition, principally from Argentina. The lower exports, combined with a reduction in estimated feed use, result in an increase of 6.6 million tons in forecast ending stocks (to 30.7 million tons).
EU barley exports are estimated at 3.5 million tons, down from 4.0 million last month. Weak international demand has depressed exports this year, and EU ending stocks of barley are forecast to reach 12.3 million tons, an increase of almost 6 million tons from last year.
Exports of sorghum by Argentina are now estimated at 1.2 million tons. Argentina is harvesting its biggest sorghum crop in more than a decade, and it is expected that strong import demand by Japan will lead to the largest sorghum exports since 1991/92.
Estimated corn imports by South Africa were reduced this month from 500,000 to 250,000 tons. Generally favorable weather conditions have boosted crop prospects, and with the 1997/98 crop now estimated to reach 8.0 million tons (up 500,000) South Africa is expected to remain a net exporter.
Japans imports of corn are also estimated lower this month, down 200,000 tons to 15.7 million. Corn imports are expected to fall due to increased use of sorghum in feed rations.
Corn imports by Iran are estimated to reach only 1.25 million tons this year, down from the previous estimate of 1.5 million and last years record imports of 1.55 million tons.
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