EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• World wheat trade in 1999/2000 is projected at 101 million tons, 5 million tons above the 1998/99 level.

• Combined exportable supplies of wheat among the major foreign exporters (EU, Argentina, Australia, and Canada) are forecast relatively unchanged from 1998/99. Despite strong export competition, U.S. exports are projected up 2.5 million tons to 31.5 million tons due to expanding global import demand. Global wheat stocks in 1999/2000 are projected to drop more than19 million tons primarily due to reductions in China, the European Union, and the United States.

• Forecast world trade in corn for 1999/2000 is set initially at 65 million tons, 1 million tons higher than forecast 1998/99 trade. U.S. corn exports are forecast only slightly higher at 47 million tons, due largely to continued, steady competition from Argentina and China.

• U.S. corn exports for 1998/99 are raised to 46.5 million tons. Chinese corn exports for 1998/99 are lowered this month by 500,000 tons to 3.5 million tons.

• World barley trade in 1999/2000 is projected up at 16.4 million tons, due to an anticipated increase in demand for barley among importers Saudi Arabia, China and Iran. EU barley exports are forecast up slightly at 7.5 million tons.

• Prospects for a smaller Chinese wheat crop in 1999/2000 are expected to boost wheat imports to 4 million tons, 2.5 million tons above the previous year’s level, but well below the average level of the 1990's. Extremely dry weather conditions during the fall and winter months will likely reduce the crop to 106 million tons, the lowest level in 4 years.

• Forecast China rice exports are increased to 1.75 million tons in calendar year 1999, increasing 250,000 tons, due to stronger than expected exports during the first quarter of the marketing year.

• 1999/2000 South Korea corn imports are forecast at 7.7 million tons, 0.7 million tons higher than the current projection for 1998/99.

• Iran is expected to increase barley imports to 1.0 million tons with forecast 1999/2000 production down sharply due to dry weather. Iran corn imports are expected up slightly at 1.1 million tons.

• Mexico sorghum imports for 1999/2000 are set initially at 3.0 million tons, up from 2.7 million tons in 1998/99 due to a forecast drop in domestic production.

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in1999/2000 is projected at 101 million tons, 5 million tons above the 1998/99 level. World production is forecast to be 572 million tons, down 16 million tons from the previous year. Among the major exporters, significant crop decreases are expected to occur in the United States, and the European Union. Production in Canada is forecast slightly above the 1998/99 level while crops in Australia and Argentina are projected up 1 million tons each. Production is down in several import markets, including China, Pakistan, Iran, and most of North Africa while the wheat crop in the former Soviet Union is expected to rebound to a more normal level. Global consumption is expected to be slightly higher, and for the second consecutive year, is projected to exceed production, drawing down ending stocks by more than19 million tons. The global stocks-to-use ratio is expected to be 20 percent.

RICE

Global rice trade in calendar year 1999 is forecast at 22 million tons, a decline of 5.5 million tons from the record level of 1998. Lower demand from key importers, Indonesia, Brazil, and the Philippines largely explains this year-to-year downturn, as more normal global, post-El Nino weather is expected to reduce import needs in 1999. World rice production in 1998/99 is expected to decline nearly 8 million tons from the previous year’s record, owing to a smaller China crop. This decrease in global production, paired with a 2 million ton increase in total consumption over 1997/98, is expected to draw 1998/99 global rice stocks down to 46.8 million tons, the lowest level in a decade.

COARSE GRAINS

World production of coarse grains is projected at 885 million tons for 1999/2000, while consumption is forecast at 882 million tons. With world total consumption of coarse grains forecast nearly equal to production for the first time in three years, global carry-out stocks are not projected to rise appreciably from 1998/99 and are set initially almost unchanged at 145 million tons, up only 2 million tons.

The initial projection for total 1999/2000 coarse grains trade is at 92 million tons, up 2 million tons from forecast 1998/99 trade. The boost in trade for coarse grains is shared between corn and barley. Trade in corn is forecast for 1999/2000 at 65 million tons, 1 million tons higher than 1998/99. Barley trade is forecast up an amount equal to corn, 1 million tons, to 16 million tons, but the 1999/2000 barley world trade forecast represents a more significant increase in import demand for barley compared to corn. Trade in other coarse grains is forecast substantially unchanged with sorghum at 6.6 million tons, up 200,000 tons; oats at 2.3 million tons, up 100,000 tons; and rye at 1.8 million tons, down 100,000 tons.

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Last modified: Thursday, November 13, 2003