EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• The 1998/99 wheat export forecast for the United States is reduced by 1 million tons, to 29 million tons on weak export prospects for white and soft red winter wheat because of ample supplies in competing exporters and lower demand in several importing countries.

• Global rice trade in 1999 is projected at 20.2 million tons, a 3.2 million ton decline from the record level expected in 1998. The United States is expected to export 2.75 million tons of rice in 1999, down 250,000 tons from the 1998 forecast.

• World rice production in 1998/99 is projected at a record 575 million tons (rough). Although consumption is also expected to reach record levels, ending stocks are projected to increase.

• Wheat export forecast for Turkey in 1998/99 is raised 1 million tons (to 2 million tons) based on higher production prospects. Exports in 1997/98 are estimated at 1.5 million tons.

• Exports of barley by Canada are forecast to reach only 2.25 million tons in 1998/99, down 500,000 tons from the previous forecast, as lower plantings and robust feed demand reduce exportable supplies.

• Wheat Imports by Iran are projected to be 500,000 tons lower (to 5 million tons) in 1998/99 due to downward revisions in the 1997/98 import estimate, consumption and stock levels. Imports in 1997/98 are estimated at 4 million tons.

• 1999 rice imports in the "Other Asia" region are expected to decline by over 4 million tons from the 1998 level, primarily due to an expected return to normal weather and production in Indonesia and the Philippines.

• World trade in corn is estimated 1 million tons higher (at 64 million tons) in 1997/98 due to increased demand in Japan, Mexico, South Korea and Brazil. World barley trade in 1997/98 is estimated at 14.1 million tons, down 400,000 tons, on reduced demand for feed barley by both Saudi Arabia and Japan.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• United States returns as major supplier to Brazil’s rice market, reflecting regional shortfalls.

• Although Thailand’s economy is struggling, grain imports are expected to remain strong.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 97.7 million tons, 2 million tons lower than the 1997/98 level. World production is forecast to be 601 million tons, down 9 million tons from the 1997/98 record. A decrease of 3 million tons is expected in Argentina, while only a slightly lower crop is projected in the United States. A record harvest (over 101 million tons) is expected in the European Union while Australia’s crop is projected up 1.5 million tons and Canada’s crop is forecast near the last year’s level. Lower import demand is mostly attributed to higher production in several key import markets, including most of North Africa, Iran, and Pakistan. Global consumption is forecast to reach record levels and for the first time in three years, is projected to exceed production, drawing down ending stocks by 1.4 million tons. The global stocks-to-use ratio is expected to be slightly lower at 21.8 percent.

RICE

Global rice trade in calendar year 1999 is projected at 20.2 million tons, down 3.2 million tons from 1998, as a return to normal weather will allow production to rebound in the importing countries that are driving 1998 trade to record levels. 1998/99 world production is projected at a record 575 million tons (rough), up nearly 7 million tons from the previous year. While most of the major exporters are expected to increase production or match last year’s level, the critical difference is expected in Indonesia, Bangladesh, the Philippines, and Brazil. 1998/99 production by these importers is projected to increase by a total of 6.4 million tons. The projected surge in production is expected to allow global consumption to rise to record levels.

Trade in calendar year 1998 is forecast to reach a record 23.4 million tons. The high level of trade is the result of production shortfalls in Indonesia, the Philippines, Bangladesh, and throughout most of Latin America. However, record crops in Thailand, China and India have allowed these countries to increase exports to meet the demand. The United States and Vietnam also have had increased exportable supplies available, and Japan has emerged as a major exporter of rice as food aid.

COARSE GRAINS

World coarse grain trade in 1998/99 is forecast marginally lower this month (at 88.0 million tons), and is expected to decline slightly from 1997/98 (estimated 600,000 tons higher this month, at 88.4 million). This is the second consecutive year of falling coarse grain trade. Estimated corn trade was increased for both years, with 1997/98 trade up 1 million tons to 63.9 million and 1998/99 trade raised 500,000 tons to 62.1 million. Barley trade, however, is estimated lower for both years, down 400,000 tons to 14.1 million in 1997/98 and 600,000 tons to 15.3 million in 1998/99 as demand for feed barley continues to soften. Projected coarse grain consumption in 1998/99, while still at record levels, is forecast 8 million tons lower this month, at 892 million tons.

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Last modified: Thursday, November 13, 2003