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WORLD COARSE GRAINS SITUATION AND OUTLOOK
Export quotes for U.S. corn showed considerable volatility during late June and into July, fluctuating between $100 and $107 per ton. This instability in export pricing was driven by the futures market, which experienced considerable volatility due to weather concerns. In Argentina, meanwhile, export quotes have risen steadily from $96 per ton in mid-June to $103 in mid-July. The pressure of huge new-crop supplies is fading fast, with total sales since the beginning of the 1998 harvest reaching 10 million tons.
World coarse grain trade in 1998/99 is forecast slightly lower this month, at 88.0 million tons (down 100,000). Estimated 1997/98 trade is raised 600,000 tons, to 88.4 million tons. 1998/99 coarse grain consumption is also forecast lower (down 8 million tons) to a record 892 million tons, while forecast 1997/98 consumption was also lowered, from 891 to 886 million tons.
Trade in corn is estimated at 64 million tons in 1997/98, a 1 million ton increase from last month as demand in east Asia, Brazil and Mexico increases. Forecast 1998/99 trade is also raised, by 500,000 tons, to 62.1 million tons. World barley trade is estimated lower for both 1997/98 (down 400,000 tons to 14.1 million) and 1998/99 (down 600,000 tons to 15.3 million) due to falling demand for feed barley.
Exporters
Corn exports by Argentina are now estimated at 14.0 million tons in 1997/98. Shipments since October 1 have reached almost 10 million tons, with 8 million moving out since export of the 1998 harvest began on March 1. With such a heavy share of the 1998 harvest being shipped in the 1997/98(Oct/Sep) year, forecast 1998/99 exports were reduced from 13.0 to 12.5 million tons.
Canada’s barley exports are now projected at 2.25 million tons in 1998/99, down 500,000 tons from last month, as lower plantings and increased domestic feed use lead to reduced export availability.
1997/98 barley export forecasts for Russia and the Ukraine were lowered this month, by 250,000 and 150,000 tons respectively(to 1.25 million and 600,000). With world barley demand slack and large subsidies being awarded by the EU, export pace has slowed dramatically in both countries.
Exports of corn by South Africa are estimated up 500,000 tons to 1.5 million for both 1997/98 and 1998/99.
Sorghum exports by the United States are now forecast at only 4.8 million tons (down 200,000) in 1998/99, on lower production and larger exportable supplies in Argentina.
Importers
Other Asia
Due to the continued strong pace of arrivals, corn imports by Japan are estimated to reach 16.2 million tons in 1997/98, up 500,000 tons. Strong corn imports are partially the result of reduced demand for feed barley. Purchases of barley have slowed in recent months and are now estimated to reach only 1.4 million tons in 1997/98, down 200,000 tons from both the previous estimate and from 1996/97 levels. Forecast 1998/99 imports were also lowered from 1.6 to 1.4 million tons.
Imports of corn by South Korea are estimated at 7.75 million tons for the year, with May arrivals the highest in six months. With feed utilization continuing at a higher pace than expected, forecast 1998/99 imports are also raised, to 7.0 million tons ( a 500,000 tons increase).
North America
Mexico’s purchases of U.S. corn have been strong in recent weeks, resulting in a 500,000 ton increase in estimated 1997/98 imports, to 4.5 million tons. 1998/99 imports are forecast at 3.75 million tons (a 250,000 ton increase) as projected production is reduced 500,000 tons due to the late arrival and inconsistency of summer rains.
Middle East
With no major purchases since early March, estimated barley imports by Saudi Arabia are cut from 4.5 to 4.0 million tons this month, a decline of 1.5 million tons form 1996/97 volumes. While exceptional forage crop production is responsible for part of this year’s decline in imports, overall feed demand is also estimated lower, resulting in a reduced forecast for 1998/99 imports, down 500,000 tons to 5.0 million.
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