WORLD MARKETS AND TRADE :

COMMENTARY AND CURRENT DATA

MONTHLY HIGHLIGHTS:

Strong Growth in Latin American Corn Demand: Led by Brazil and Argentina, Latin America’s consumption of corn has grown 17 percent over 5 years. Brazil’s demand growth comes primarily from its rapidly expanding poultry and pork sectors, which are among the fastest growing in the world. Argentina’s consumption has rebounded after the financial crisis of 2001/02. Driven by poultry, cattle, and milk production, the country’s corn feed usage is expected to grow by 8.5 percent next year. In addition to Brazil and Argentina, other countries such as Columbia, Peru, El Salvador, and Ecuador are all experiencing significant development in local feed demand. The regional growth trend means less exportable supplies in Argentina and Brazil and higher imports by the others, both helpful to U.S. corn exports (See PDF version for chart).

Domestic: July export bids for #2 yellow corn averaged over $104/MT, up more than $6 from June. Although corn export values are about the same as one year ago, they have gained about $10/MT since the 2004/05 harvest time lows.

July export bids for #2 yellow sorghum (Texas Gulf) jumped over $6 to average above $104/MT. Sorghum export values have gained over $5/MT since one year ago and nearly $15/MT since the 2004/05 harvest. Sorghum and corn remain at similar values and both have jumped about 9 percent since May. High domestic freight rates, together with concerns over crop conditions, are keeping export bids firm (See PDF version for chart).

• Bulgaria corn is up 100,000 tons to 250,000 due to a larger expected crop.

• Canada corn is up 500,000 tons to 2.5 million based on smaller crop prospects.

• Indonesia corn is lowered by 300,000 tons to 600,000 as continued problems with Avian Influenza are expected to limit feed demand.

• Tunisia barley is up 100,000 tons to 200,000 with strong recent purchases.

• China corn is boosted by 1.0 million tons to 7.0 million on account of a stronger-than-expected shipment pace in recent months.

• South Africa corn is up 200,000 tons to 1.7 million, the highest in 10 years, as the export pace quickens.

• Argentine barley is increased 100,000 tons to 300,000 (the highest in 40 years) due to strong exports to Brazil and some sales to Middle East markets.

• Romania barley is down 100,000 tons to 200,000 with slow exports to date.

• United States barley is up 125,000 tons to 700,000 (the highest in 4 years) with strong recent sales, especially to Saudi Arabia.

• Canada oats is up 200,000 tons to 1.4 million with stronger than expected shipments to date.

• EU-25 oats is down 100,000 to 350,000 with slow exports and few licenses given in recent months.

• Egypt corn is up 300,000 tons to 5.3 million in light of recent purchases.

• Iran corn is up 300,000 tons to 2.3 million on the basis of strong demand from the poultry sector.

• Zimbabwe corn is raised by 350,000 tons to 1.0 million as evidenced by a strong shipment pace from South Africa.

• China barley is up 200,000 tons to 2.0 million as the result of stronger than expected imports in recent months.

• Jordan and Morocco barley are both up 100,000 tons to 600,000 and 400,000, respectively, based on strong imports and continued purchases.

• United States oats is up 100,000 to 1.6 million with continued strong late-season shipments from Canada.

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Last modified: Thursday, November 13, 2003