COARSE GRAINS: WORLD MARKETS AND TRADE
U.S. Corn Exports Still Sliding: U.S. exports are forecast to drop by 1.5 million tons again this month to 48.0 million, just below last year's level of 48.6 million tons, with stronger competition from Argentina and larger global grain supplies.
EU Rye Stocks In Permanent Decline: With rye no longer eligible for intervention support following EU policy changes, intervention stocks have been slashed in half from levels as high as 5 million tons just 2 years ago. Driving the stock drawdown has been aggressive sales for export, at prices as low as 50 euros, only half what was originally paid for it! Nearly half a million tons have already been sold, the most since 2000/01, and such low prices have made that rye attractive to markets such as Japan. Once these stocks are eventually depleted, however, the EU will likely not be a viable major rye exporter. Removing the guaranteed market at a guaranteed price (intervention) is forcing some changes in the EU rye market. Many farmers are switching to other more profitable crops where possible (winter rye plantings in Germany are reportedly down as much as 10 percent). Industrial use of surplus rye is likely to expand as ethanol plants are being built (See PDF version for chart).
Domestic: January export bids for #2 yellow corn averaged about $96/MT, unchanged from last month.
January export bids for #2 yellow sorghum (Texas Gulf) averaged $90/MT, down $1 from last month and $32 below year-ago prices. Sorghum carried a $6-per-ton discount to corn in January, widening slightly from the previous month.
TRADE CHANGES IN 2004/2005
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