EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• Projected corn exports from the United States are up 1.0 million tons for 1998/99, to 43.5 million tons, owing to an expected reduction in corn export competition.

• The 1998 rice export forecast for the United States is increased to 3.1 million tons, up 100,000 tons from last month.

• Wheat exports by the European Union in 1998/99 are projected at 18 million tons, 1.0 million tons higher than last month’s estimate based on food aid donations to Russia.

• Argentina corn export estimates are reduced 1.5 million tons (to 9.0 million tons) for 1998/99 due to reduced production prospects.

• The 1998/99 wheat export forecast for Australia is lowered 1 million tons, to 14.5 million tons, based on smaller production prospects. At the same time, Canadian wheat exports are forecast 500,000 tons higher (15.5 million tons) based on a higher crop.

• The 1998 rice export forecast for China is raised to 3.5 million tons on a continued strong shipment pace.

• Russian wheat imports in 1998/99 are forecast at 4.7 million tons, 1.0 million tons higher than last month’s estimate, due to food aid donations by the European Union.

• Russia’s rye imports were raised 500,000 tons for 1998/99, reflecting European Union food aid donations announced recently.

• The 1998 rice export forecast for Pakistan is lowered to 1.8 million tons as anticipated exports to Indonesia will not occur before the end of the calendar year.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• Infrastructure improvements and importer consolidation streamline Venezuela’s wheat market.

• In filling a deficit created by El Nino, U.S. rice has earned a niche in the Colombian market.

• After two years of exclusion, U.S. is permitted partial access to Brazil’s wheat market.

• Liberalization in Indonesia’s wheat sector is having an initially unsettling impact on the market.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 97.8 million tons, 3 million tons lower than the 1997/98 level. World production is forecast to be 586 million tons, down 25 million tons from last year’s record. A decrease of nearly 5 million tons is expected in Argentina, while Canada’s crop is forecast unchanged from the previous year. A record harvest (over 103 million tons) is expected in the European Union while Australia’s crop is projected up almost 2 million tons and production in the United States is forecast to exceed last year’s bumper harvest by 1 million 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 14 million tons. The global stocks-to-use ratio at 20.5 is down 3 percentage points from a year earlier.

RICE

Global rice trade in calendar year 1998 is forecast to reach a record 25.7 million tons, a 6.7 million ton increase over last year, and 4.7 million tons more than the previous record. The surge in trade is due to crop shortfalls caused in part by the effects of El Nino, in Indonesia, the Philippines, Bangladesh, and throughout much of Latin America, that greatly increased import needs. However, record crops in Thailand, China and India propelled world production to a record level as well, allowing these exporters to increase shipments to help meet the huge demand. Increased exports have also been available from the United States and Vietnam, and Japan has taken the opportunity to reduce its burdensome stockpile by exporting a large quantity of rice as food aid. In 1999, trade is projected to fall to 21.4 million tons as production is expected to rebound in Latin America and most of the importer countries that are driving 1998 trade. Global production and stocks in 1998/99 are projected to be down from the 1997/98 record, primarily due to a smaller crop in China.

COARSE GRAINS

Global coarse grain trade for 1998/99 is forecast at 87.8 million tons, nearly unchanged from the 1997/98 forecast 86.5 million tons. Stock estimates for 1998/99 are up 3.0 million tons from 1997/98, with projected coarse grain stocks building most heavily in the United States’ corn stocks and European Union’s barley stocks. World coarse grain production is predicted to be 882.2 million tons in 1998/99, down 4.3 million tons from 1997/98 as reduced production in the FSU and the EU more than offset the larger harvests in the US and China. Coarse grain consumption in 1998/99 is now forecast marginally higher than the 1997/98 level.

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Last modified: Thursday, November 13, 2003