EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• United States barley exports are lowered 100,000 tons to 700,000 tons while United States barley imports are reduced 150,000 tons to 600,000 tons.

• Wheat exports by Australia in 1998/99 are estimated at 15.5 million tons, 1 million tons higher than last month’s estimate due to aggressive export shipments to date and reduced competition from Canada.

• The 1999 rice export forecast for Argentina is increased to a record 625,000 tons, owing to expectations for a record harvest.

• Wheat imports by Indonesia in 1998/99 are projected at 2.5 million tons, 300,000 tons higher than last month’s estimate because of commercial purchases by private flour mills.

• The Malaysia corn import estimate for 1998/99 is lowered by 400,000 tons to 2.1 million tons.

• Canadian wheat exports in 1998/99 are estimated 500,000 tons lower (14.5 million tons) based on slow export sales pace to date. Also, wheat exports by Kazakstan are lowered 800,000 tons, to 1.0 million tons.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• EU reforms to have domestic and international trade impacts.

• Advances in infrastructure and grain production technology boost Argentina’s export position.

• Bearish world prices have increased the private trade’s role in Pakistani wheat importation.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 95 million tons, 5.5 million tons lower than the 1997/98 level. World production is forecast to be 587 million tons, down 23 million tons from last year’s record, primarily due to the reductions in the former Soviet Union. Production in the major exporting countries is up, as a smaller crop in Argentina is offset by larger crops in both the United States and Australia, and a record harvest (over 103 million tons) in the European Union. Canada’s crop is unchanged from the previous year. Lower import demand is mostly attributed to higher production in several key import markets, including most of North Africa, and Iran. 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 4.7 million tons. The global stocks-to-use ratio at 22.7 is down slightly from a year earlier.

RICE

Global rice trade in calendar year 1999 is forecast at 21.7 million tons, a 6 million ton decline from the record level of 1998. The year-to-year drop in trade is primarily due to lower demand from Indonesia, the Philippines, and Brazil. After El Niño-reduced crops led to record demand from these key importers in 1998, a return to "normal" weather is expected to lower import needs in 1999. Total world production is forecast to fall to 561 million tons (rough basis), an 10 million ton decline from the record level of 1997/98, mainly due to smaller crops in China and India. The decrease in production, combined with nearly steady consumption, is expected to draw global rice stocks down to the lowest level in a decade.

COARSE GRAINS

Global coarse grain trade in 1998/99 is projected to rise to 89.7 million tons, an increase of 3.3 million tons over 1997/98. This increase is largely due to an upsurge of demand for coarse grains in the Middle East and Latin America while imports by Asia are down for a fourth consecutive year in 1998/99 at 38.0 million tons from a peak of 47.8 million tons in 1994/95. Global production in 1998/99 is expected to fall 2.7 million tons from the previous year to 878.1 million tons. The primary factor drawing down world production is the 30.0 million ton decline in the former Soviet Union. Global consumption in 1998/99 is virtually unchanged at 873.2 million tons, while global ending stocks are projected to build by 5.0 million tons worldwide in 1998/99 to 140.4 million tons. This stock build-up is largely due to a 13.0 million ton year-to-year increase in U.S. ending stocks.

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Last modified: Thursday, November 13, 2003