EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• Forecast corn exports by the United States are reduced 2.5 million tons (to 39.0) due to softer demand and increased competition, principally from Argentina.

• The 1997/98 wheat export forecast for the United States is reduced by 500,000 tons, to 28.5 million tons because of sluggish export sales registrations over the past 3 months.

• The 1998 rice export forecast for the United States is increased to 2.8 million tons on continued strong sales of rough rice to Latin America.

• The July/June wheat export forecast for Australia in 1997/98 is lowered 500,000 tons based on delayed shipments to India. Concurrently, India’s wheat import forecast is lowered by 500,000 tons.

• The 1998 rice import forecast for Indonesia is increased to a record 4 million tons.

• Estimated barley exports by the EU are lowered 500,000 tons, to 3.5 million, due to weak international demand.

• The 1998 rice export forecast for Vietnam is raised to 3.6 million tons as shipments during the first quarter of the year moved at record pace.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• Australia’s dependence on agricultural exports dictates assertive marketing practices.

• After several very good grain crops, China gains some confidence in its food outlook.

• Colombia’s wheat market growing, but so is the competition.

• The U.S. petfood market in Latin America is expected to continue its phenomenal growth.

• Indonesia’s rice imports have been booming, and more uncertainty lies ahead.

• Vietnam plans an information board to bring more order to its rice export marketing.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1997/98 is projected at 98.1 million tons, slightly higher than the 1996/97 level. While world production is forecast to reach a record 610 million tons, the most significant increases occurred in countries that currently have a minimal export impact on trade, mainly China and the former Soviet Union. Total export availability in Argentina, Australia, Canada, and the European Union is forecast down 10 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 the prospective increase in global ending stocks, up 25 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 forecast at a record 21.5 million tons, a 2.6 million ton increase over the estimated 1997 level, and 500,000 tons more than the previous record set in 1995. The high level of trade is fueled by record world production and strong demand, particularly from Indonesia and the Philippines. El Nino-related drought means these two countries will need substantial imports in 1998 to supplement domestic production. Indonesia is expected to import a record 4 million tons in 1998 - - the highest level of imports in a calendar year by any country ever. Despite the surge in demand, international supplies should be sufficient as 1997/98 world production (rough basis) is forecast at a record 565 million tons, a 2 million ton gain over last year. Thailand and Vietnam are each expected to increase exports in 1998, and record crops in China and India are expected to allow these two countries to re-emerge as major exporters. In Latin America, however, production and export expectations for Argentina and Uruguay are lower than a year ago due to adverse weather, also attributed to El Nino. As a result, Latin American importers will likely need to look outside the region, primarily to the United States.

COARSE GRAINS

World trade in coarse grains is estimated at 87.6 million tons this month, down 1.5 million tons from the previous estimate. World trade in corn is estimated 1.3 million tons lower, at 62.9 million tons, while barley trade estimates were cut 500,000 tons to 14.4 million. Ending stocks of corn are forecast to reach 80 million tons (up 7 million tons from last month), due primarily to a 6.6 million ton increase in forecast U.S. ending stocks. Trade in sorghum and oats are estimated higher this month, by 200,000 tons (to 6.8 million) and 100,000 tons (to 2.3 million) respectively.

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Last modified: Thursday, November 13, 2003