SITUATION AND OUTLOOK:

COMMENTARY AND CURRENT DATA

WORLD COARSE GRAINS SITUATION AND OUTLOOK

World coarse grain trade in 2002/03 remains nearly unchanged from a year earlier at 101.1 million tons. The gap between global consumption and global production is expected to double, lowering carryout stocks 29.9 million tons to approximately 144 million. U.S. corn, China corn, and EU barley and rye are forecast to comprise more than two-thirds of world coarse grain stocks.

Global corn trade increases 1.2 million tons to 75.3 million tons in 2002/03. U.S. exports are forecast to rise due to expanding global imports and reduced competition.

Traditionally a major grains exporter, drought-stricken Australia is importing feed grains for the first time since 1994/95, despite high costs due to strict phytosanitary regulations, relatively expensive freight, and strong international prices. Australia has already purchased U.S. corn and UK wheat and may seek U.S. sorghum. In addition, Australia may have to purchase feed barley from the EU or other sources to fulfill its export commitments to Saudi Arabia.

Drought-ravaged Canada will use less barley for feed as the crop falls to 7.3 million tons, a 32 percent reduction from last year. This smaller crop far outweighs larger corn and oat crops, necessitating a drawdown in stocks and additional feed use of wheat.

Drought-decimated barley crops in Australia and North America have led Japan to seek alternative suppliers outside the Pacific region for the first time. After an initial shipment of Ukrainian barley passed quality inspection, Japan reportedly purchased more feed barley from Ukraine and the EU during the final Simultaneous Buy and Sell (SBS) tender of its fiscal year (Apr/Mar).

· U.S. corn drops 1 million tons to 49 million based on increased competition and less demand from Canada.

· Argentina corn rises 500,000 tons to 9 million as a result of higher forecast production.

· Australia sorghum down 75,000 tons to 75,000 because of reduced crop prospects.

· EU oats increases 200,000 tons to 1.2 million as a result of smaller exportable supplies in Canada.

· Canada corn down 500,000 tons to 4.0 million due to higher production.

· China barley drops 200,000 tons to 2.0 million as a result of tight global supplies of malting barley.

· EU barley increases 200,000 tons to 300,000 based on import licenses to date.

· U.S. corn drops 83,000 tons to 46.917 million based on final trade data.

· Argentina corn declines 119,000 tons to 8.581 million as per final trade data.

· Canada corn rises 179,000 tons to 3.979 million based on final trade data.

· Saudi Arabia barley up 150,000 tons to 5.65 million as a result of a strong late season import pace.

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Last modified: Thursday, November 13, 2003