WORLD MARKETS AND TRADE :

COMMENTARY AND CURRENT DATA

MONTHLY HIGHLIGHTS:

EU Oat Exports Drop to 10-year Low: European Union exports were lowered this month to the smallest amount since 1995/96. Exports are largely a function of crop size in Sweden and Finland as they are the only countries eligible for oat export subsidies from the Commission as part of their accession agreements (and consequently account for nearly all external trade). Production in these countries has continued to fall, and with low stocks (oats are not eligible for intervention), exportable supplies have shrunk. Current marketing year licenses are down nearly half from last year and virtually all exports typically go to the United States. (See PDF version for chart).

U.S. Corn Gains in Exports Over Last Year: In the face of reduced competition from Argentina and China (combined exports are down over 5 million tons from last year), U.S. corn exports are expected to surge to a 7-year high and the United States will consequently garner an even larger market share. In recent weeks, export sales have been very strong, especially to markets in Asia and the Western Hemisphere.

Argentine corn exports are considerably lower this year because of reduced production and stronger domestic feeding, and China’s exports are expected to fall to the lowest level in 7 years. (See PDF version for table).

PRICES:

Domestic: February export bids for #2 yellow corn were up sharply by over $4 per ton to $107. Bids for #2 yellow sorghum (Texas Gulf) were up a similar amount to $105/MT.

Corn prices have been supported by strong export sales and shipments, as well as forecasts for lower ending stocks due to a sharp increase in the use of corn for ethanol. However, concerns over bird flu and large feed grain supplies have kept prices in check.

Sorghum prices have been underpinned by relatively strong sales and food aid shipments, as well as firmness in the corn market.

• United States corn is up 2.0 million tons to 49.5 million, the highest in 7 years, due to shrinking competition from China and Argentina.

• Brazil corn is cut nearly in half to 700,000 tons, the lowest in 6 years, on uncompetitive prices, impacted in part by a strong Real.

• China corn is down 1.0 million tons to 5.0 million, the lowest in 7 years. The trade awaits new export quotas in the face of rising domestic prices.

• EU-25 corn is cut in half to 300,000 tons given the slow pace of export licenses.

• South Africa corn is down 300,000 tons to 1.2 million because of tight supplies, caused by the smallest crop in over a decade.

• Canada barley is raised by 300,000 tons to 2.3 million, a 9-year high, as large supplies have allowed very strong sales and shipments to date.

• Russia barley is up 500,000 tons to 1.3 million. Despite smaller production this year, exports have been strong in recent months, primarily to Middle Eastern markets.

• EU-25 oats is cut by 50,000 tons to 300,000--a 10-year low--as the pace of sales has been slow.

• Brazil corn is down by 100,000 tons to 600,000 because of adequate domestic supplies, rising Argentine prices, and strict import regulations on Argentine corn.

• Egypt corn is cut 500,000 tons (to 4.3 million) again this month because of reduced poultry production impacted by Avian Influenza.

• Iran barley is increased 400,000 tons to 1.2 million on continued strong purchases from Canada, EU-25, and Ukraine.

• Syria barley is up 300,000 tons to 800,000 as drought has slashed production to a 5-year low and the early season import pace has been strong.

• Mexico sorghum is down by 200,000 tons to 3.3 million as a result of a slow purchase pace. Corn and cracked corn imports continue to reduce the demand for sorghum, despite lower production for both corn and sorghum.
   

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Last modified: Monday, March 13, 2006