EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• The 1998/99 wheat export forecast for the United States is lowered by 1 million tons, to 29.5 million tons due to increased competition and lower global imports.

• Projected corn exports from the United States are up 500,000 tons for 1997/98 and 1998/99 to 38.0 million tons and 41.0 million tons, respectively.

• The 1999 rice export forecast for the United States is increased 100,000 tons (to 2.75 million tons) because of an upward revision in 1998/99 estimated production.

• The 1998/99 wheat export forecast for Australia is raised 1 million tons (to 16.5 million tons) based on near-record production prospects. At the same time, Canada’s exports are expected to be 15.5 million tons (down 500,000 tons) as smaller production prospects are partially offset by larger-than-expected carry-in stocks.

• 1998/99 Argentine corn export estimate is reduced 500,000 tons to 12.0 million tons because of reduced production prospects.

• Iranian wheat imports in 1998/99 are forecast down 1 million tons (to 4 million tons) due to lower-than-expected purchases over the last few months.

• The 1999 rice export forecast for China is lowered to 1 million tons on a reduction in the crop.

• European Union barley export projections are down 500,000 tons for 1997/98 and 1.0 million tons for 1998/99.

• The 1999 import forecast for Bangladesh is raised to 500,000 tons as flooding has reduced forecast production.

  FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• NAFTA is Providing Better Access to Mexico's Grain Markets

• Congressional Waiver Allows Vietnam Export Credit Guarantees

• MERCOSUR Presents a Challenge for Exporters of U.S. Grains

• CAP Reform May Ease the Need for EU Grain Export Subsidies

• Peru Takes Important Step in Eliminating Wheat Import Surcharge

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 98.4 million tons, nearly 2 million tons lower than the 1997/98 level. World production is forecast to be 596 million tons, down 15 million tons from last year’s record. A decrease of 3 million tons is expected in Argentina, while Canada’s crop is forecast nearly 1 million tons below the previous year’s level. A record harvest (over 103 million tons) is expected in the European Union while Australia’s crop is projected up 4 million tons and production in the United States is forecast to exceed last year’s bumper harvest by over 400,000 tons. 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 nearly 7.5 million tons. The global stocks-to-use ratio at 21.1 is down almost 2 percentage points from a year earlier.

RICE

Global rice trade in calendar year 1998 is forecast to reach a record 23.85 million tons. The high level of trade is largely demand driven as El Niño-related production shortfalls in Southeast Asia and throughout most of Latin America have greatly increased import needs. However, record crops in Thailand, China and India have allowed these exporters to increase shipments to help meet the huge demand. The United States and Vietnam also have large exportable supplies available, and Japan has emerged as a major provider of rice as food aid. In 1999, trade is projected to fall to 20.1 million tons as production is expected to rebound in several of the countries that are driving 1998 trade. However, world production and stocks are projected to fall sharply in 1998/99, primarily due to the recent flooding in China.

COARSE GRAINS

Global coarse grain trade for 1998/99 is forecast at 87.3 million tons compared to 88.1 million tons in 1997/98. Stocks are up almost 8 million tons from 1997/98, with projected coarse grain stocks building most heavily in the United States’ corn stocks and European Union barley stocks. World coarse grain production is up 600,000 tons from last month’s estimate to 894.4 millions tons, slightly above 1997/98 production of 892.0 million tons. Consumption is forecast to rise year to year to 886.8 million tons in 1998/99, almost unchanged from 1997/98.

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Last modified: Thursday, November 13, 2003