WORLD COARSE GRAINS SITUATION AND OUTLOOK
By the second week in June, export quotes for U.S. corn (FOB, Gulf) had fallen to only $100 per tons, a decline of $8 during the past month. In contrast, price quotes for Argentine corn held steady at about $96 per ton (FOB Rosario), making U.S. corn- for the first time in several months- the lowest cost option for many importers.
Projected coarse grain trade in 1998/99 is unchanged this month, at 88.1 million tons. Estimated coarse grain trade in 1997/98 was raised from 86.5 to 87.8 million tons, with estimates for trade in corn, barley and sorghum all increased slightly. Global coarse grain consumption is forecast at a record 900 million tons in 1998/99, down 2.5 million tons from the previous forecast, but a 9 million ton increase from 1997/98.
World trade in corn is forecast at 62.9 million tons in 1997/98, an increase of 800,000 tons. Global production is estimated at 579 million tons, down 4.0 million tons from last month, due to a six million ton reduction in estimated production in China. Corn consumption is also estimated lower for both 1997/98 and 1998/99 (down 7.0 million tons to 588 million and 2.0 million to 597 million, respectively) while remaining the highest and second-highest totals ever.
With burdensome stocks, a bumper harvest in the offing, and lower export prospects for major competitors, barley exports by the EU are expected to increase. Exports are now estimated at 4.0 million tons in 1997/98 and 6.5 million in 1998/99, increases of 500,000 tons for each year.
Barley exports by Canada are estimated at 2.5 million tons for 1997/98, down from the previous estimate of 3.0 million.
Forecast 1998/99 barley exports by Australia are reduced from 3.0 to 2.5 million tons, as current prices favor increased planting of canola and wheat at the expense of barley and oats.
The estimate of Argentinas 1997/98 corn exports is raised from 13.0 to 13.5 million tons. Despite transportation difficulties caused by localized flooding, and the additional strain of heavy wheat and soybean exports, Argentinas Ministry of Agriculture estimates March-May exports at more than 6.0 million tons.
Corn exports by South Africa are now estimated at 1.0 million tons (an increase of 500,000) for 1997/98, as preliminary export data indicates higher than anticipated first-half shipments. Projected 1998/99 exports were also increased to 1.0 million tons, up from 750,000 tons.
Corn and sorghum imports by Mexico are both estimated 300,000 tons higher this month (up to 4.0 and 3.0 million tons respectively).
The estimate of 1997/98 corn imports by Canada was raised from 1.0 to 1.2 million tons.
Estimated 1997/98 corn imports by the Philippines were increased from 250,000 to 500,000 tons. With the peso having stabilized in recent months, internal corn prices have risen to the point where commercial imports are being contracted despite a 35% tariff and currency risk.
Large scale culling of hogs in the wake of last years outbreak of Foot-and-Mouth Disease continues to dampen feed grain demand in Taiwan. 1997/98 corn imports are estimated at 4.75 million tons, down 250,000 tons from last month and a reduction of one million tons from 1996/97 import levels.
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