WORLD MARKETS AND TRADE :

COMMENTARY AND CURRENT DATA

MONTHLY HIGHLIGHTS:

Feeding in Europe/Black Sea Region Shifts to Barley: The differing supply and demand situations between wheat and barley this year, and subsequent price spreads, are encouraging a shift in feeding towards barley. Very tight wheat supplies both in these regions and around the world have caused export prices to soar. This will likely draw supplies in the EU-25, Russia, and Ukraine from domestic feeding and into export channels, to be replaced by lower-priced ample barley supplies. A year ago, French barley prices were at a $7 premium to wheat in Rouen, whereas now barley is at a $24 discount. The situation has been similar in the Black Sea region, where barley export prices a year ago were at a $10 per ton premium compared to milling wheat, and are now at a $27 discount (See PDF version for chart).

PRICES:

Domestic: July export bids for #2 yellow corn were up nearly $5 per ton to $114. Bids for #2 yellow sorghum (Texas Gulf) were up sharply by over $7 to $119 per ton.

Corn prices rose in July based on concerns over growing conditions with strong exports and domestic demand providing additional support. Sorghum export prices continue at a premium to corn and are supported by food aid shipments and prospects for a poor 2006 harvest (See PDF version for chart).

• EU-25 barley is lowered 300,000 tons to 3.0 million on lower production and higher domestic feeding.

• Ukraine barley is up 300,000 tons to a record 4.6 million as production is raised this month.

• United States sorghum is down 500,000 tons to 4.3 as production is slashed to a 50-year low.

• Japan corn is raised 300,000 tons to 16.5 million because of strong demand from the processing sector and buoyant imports this year.

• Mexico corn is cut by 500,000 tons both in 2005/06 and 2006/07 to 7.0 million but is still a record. The pace of shipments, quantity of cupos, and data on cracked corn imports (the latter excluded from the balance sheet) all argue for lower trade for both years.

• Mexico sorghum is cut by 500,000 tons to 3.1 million due to tight U.S. supplies.

• Canada, Columbia, Israel, Japan, Peru, Syria, and Taiwan corn are each raised 200,000 tons based on the pace of shipments to date.

• Iran corn is slashed by 500,000 tons to 1.8 million based on the sluggish pace of shipments (2006/07 imports reduced to 1.8 million tons as well).

• EU-25 corn is reduced by 200,000 tons to 2.8 million based on the pace of shipments and import licenses.

Return to Table of Contents

Last modified: Monday, August 14, 2006