WORLD MARKETS AND TRADE :

COMMENTARY AND CURRENT DATA

World coarse grain production in 2007/08 is forecast to be sharply higher than last year and a new record. With global consumption expanding by over 40 million tons, ending stocks are forecast to drop to their lowest levels in over 30 years. World trade is little changed, although it remains at a higher plane.

Global corn production is forecast at a record 765 million tons, up sharply from 2006/07. Similarly, consumption is projected to climb to a record 769 million tons. This gain is led by growth in corn used for ethanol in the United States, although foreign consumption continues to expand at an average of nearly 15 million tons annually. World corn trade is expected to be virtually unchanged from last year’s record. However, U.S. exports and market share are forecast to drop because of renewed competition from the Southern Hemisphere. China is expected to remain a net exporter but at diminished levels. Mexico's imports will rise sharply. (Note that the forecast for 2007/08 assumes that cracked corn imports cease and that all imports are bulk corn. This reflects expected changes with the final phase-in of NAFTA in January 2008.).

Global barley trade is projected to rebound as a result of higher production and consequently lower prices in most key exporters. Australian production is forecast to recover from last year’s drought ravaged crop, and regain its spot as a primary supplier. In addition, Black Sea region crops are expected to be large again this year, with Ukraine forecast to remain the world’s largest exporter. These ample exportable supplies are expected to boost global imports, especially as key Australian markets such as China and Saudi Arabia can return to more normal buying patterns. Imports by Morocco are also expected to jump, as dryness has cut domestic production by more than half.

Global sorghum trade is forecast at 5 million tons, up 10 percent year to year, although still within the long term downward trend. Mexico’s imports are forecast at 3 million tons, up sharply year to year, as a result of much larger U.S. exportable supplies. Larger crops in the United States and Australia are expected to be offset by smaller ones in the Sub-Saharan Africa.

Global oat trade continues to be dominated by U.S. demand. Canadian supplies are forecast to be the largest in nearly 30 years as a result of sharply higher plantings, but much of this increased supply will likely go into feed channels. Scandinavian oat production is forecast higher, and, consequently EU exports are expected to be up slightly.

Global rye trade is expected to continue to shrivel and largely disappear. With EU-27 intervention stocks now nonexistent, the primary source of global exports has vanished, leaving primarily only small quantities of cross-border trade.

United States corn is lowered 1.0 million tons to 55.0 million based on a slowdown in the pace of sales and shipments.

Argentina corn is down 500,000 tons to 13.0 million because of slow new-crop sales in light of government actions.

Brazil corn is up 250,000 tons to 5.750 million based on updated trade data.

China corn is raised 1.0 million tons to 4.5 million amid indications of additional corn export quotas.

Paraguay corn is raised 300,000 tons to a record 1.4 million because of a bigger crop.

Japan corn is lowered 300,000 tons to 16.2 million, the lowest in 7 years. Despite an early-season surge in corn purchases, recent sales and shipments have slowed markedly.

Mexico corn is raised 500,000 tons to a record 8.5 million because of higher feed demand.

South Africa corn is reduced by 250,000 to 800,000 tons because of a higher production forecast.

South Korea corn is raised 400,000 tons to a record 9.2 million as the country continues to seek corn in place of scarce feed-quality wheat and because of current high inventories of animals.

Vietnam corn is raised by 300,000 tons to a record 650,000 because of continued growth in the feed sector and trade with surrounding countries.

China barley is lowered 200,000 tons to 1.8 million as shipments have slowed resulting from sharply reduced malting barley supplies in Australia.

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Last modified: Friday, May 11, 2007