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USDA Grains: World Markets and Trade


11 October 2012

USDA Grains: World Markets and Trade - October 2012USDA Grains: World Markets and Trade - October 2012


USDA Grains: World Markets and Trade Reports

U.S. corn exports for 2012/13 are cut again this month and are now forecast to be the lowest in 40 years. Tighter carryin stocks have reduced exportable supplies while export competition has intensified, particularly from Brazil. Global import demand is driving Brazil’s exports, which are supported by a record second crop. The torrid export pace is expected to continue until early 2013. Shipping capacity for corn is not likely to be constrained by competition from the short 2011/12 soybean crop.

High corn prices over the past several years have driven corn area expansion in the United States and competitor countries. Brazil, Ukraine, and Argentina together boosted corn production by over 30 million tons in just 5 years.

Although U.S. producers responded to the high prices in 2012 by planting the largest acreage to corn since 1937, poor weather decimated crop prospects and sharply reduced exportable supplies. Meanwhile, combined exports from Brazil, Ukraine, and Argentina are expected to surge ahead of the United States for the second year in a row.

WHEAT: WORLD MARKETS AND TRADE

OVERVIEW

Global wheat production for 2012/13 is lowered, driven primarily by cuts in Australia and Russia. Global trade is nearly unchanged. U.S. exports are down as a result of greater competition from Argentina and larger-than-expected exports from Russia. The season-average U.S. farm price is unchanged.

PRICES:

Domestic: Prices of all wheat classes fell slightly in September as a result of improving weather conditions for winter wheat planting and slow export sales. Hard Red Winter (HRW) eased $4 to $367 per ton, Soft Red Winter (SRW) and Hard Red Spring (HRS) both fell $8 to $341 and $382 per ton, respectively. Soft White Winter (SWW) slumped $15 to $340 per ton.

TRADE CHANGES IN 2012/13

Selected Exporters

Argentina is up 500,000 tons to 7.3 million owing to higher domestic supplies and strong shipments.

Australia is down 500,000 tons to 20.5 million on reduced production prospects.

Canada is cut 500,000 tons to 19.0 million because of lower crop production and higher domestic feeding.

EU is slashed 1.0 million tons to 16.5 million in view of tighter domestic feed grain supplies.

India is raised 1.0 million tons to 6.0 million, a record, given improved competitiveness from surplus supplies and higher global prices.

Russia is up 1.0 million tons to 9.0 million due to the strong pace of shipments and sales for delivery through November.

United States is reduced 1.0 million tons to 31.5 million as a result of intensified competition from other exporters.

Selected Importers

Algeria is raised 300,000 tons to 5.3 million due to lower production.

Russia is up 500,000 tons to 1.0 million on tight domestic supplies.

RICE: WORLD MARKETS AND TRADE

OVERVIEW

Global rice production and consumption are forecast to be records in 2012/13, while trade is down year to year. U.S. production increased, but exports remain unchanged. Global trade in 2011/2012 is forecast at a record nearly 38 million tons based on record shipments from India and stronger demand in West Africa.

PRICES

Long-grain prices continue to remain relatively steady, with a clear division between two price levels. At the lower end, Pakistan, India, and Vietnam have converged to around $450/MT. The higher tier exporters, Uruguay, the United States, and Thailand had converged to around $580 from mid-July into early September. By October, these had diverged to a nearly $70 spread with the U.S. remaining steady, Uruguay moving up on short regional supplies, and Thailand down as stocks are released

TRADE CHANGES

Selected Exporters

India is up 1.8 million to a record 9.8 million in 2012 (over double the previous year) spurred by a strong, steady pace of shipments, particularly to West Africa.

Burma is raised 150,000 tons to 750,000 in 2012 on the pace of shipments, especially to China.

Egypt is boosted 250,000 tons to 850,000 in 2013 as the government officially lifts the export ban.

China is lowered 100,000 tons to 500,000 in 2013 as prices remain uncompetitive.

Selected Importers

Nigeria is up 550,000 tons to a record 3.0 million in 2012 as traders accumulate stocks in anticipation of higher levies.

China is boosted 400,000 tons to 1.9 million in 2012 on shipment pace and also raised 200,000 tons to 1.5 million in 2013 as relatively high domestic prices attract imports.

Egypt is down 250,000 tons to 550,000 in 2012 and also slashed 600,000 tons to 150,000 in 2013 on ample domestic supplies for the ration system.

Bangladesh is lowered 160,000 tons to 240,000 for 2012 and also dropped 350,000 tons to 250,000 in 2013 on sufficient domestic supplies.

Iraq is raised 100,000 tons to 1.3 million in 2013 on the expectation that current growth patterns will continue.

COARSE GRAINS: WORLD MARKETS AND TRADE

OVERVIEW

Global corn trade for 2012/13 is boosted 2.5 million tons, mostly on higher EU imports. U.S. corn exports are cut because of tighter supplies due mostly to a smaller carryin. The seasonaverage farm price is projected lower from last month (based on lower-than-expected earlyseason prices and prospects for heavy fall deliveries) though remains at a record. Global trade for 2011/12 is also boosted nearly 2.5 million tons (more than 6.0 million tons since June) as indicated by larger shipments from South America that more than offset smaller U.S. exports.

PRICES

U.S. corn export quotes have continued to slide since the release of USDA’s September WASDE report, despite a short-term rebound from smaller-than-expected September 1 corn stocks. Prices have shed over $40 per ton since their peak around July 20 to $318 per ton, likely due to seasonal harvest pressure combined with strong competition from South America.

South American quotes have moved in tandem with U.S. corn but remain at a large discount.

TRADE CHANGES IN 2012/13

Selected Exporters

U.S. corn is cut by 2.5 million tons to 31.0 million, the lowest in 40 years, because of intense competition evidenced by poor sales and shipments.

Brazilian corn is raised sharply by 4.5 million tons to a new record 19.0 million. August and September shipments imply a record export pace for the next several months and U.S. trade remains sluggish. (Exports for 2011/12 are raised 700,000 tons to 12.7 million.)

Indian corn is up 500,000 tons to 3.0 million as high global prices keep exports competitive, especially to Southeast Asia (exports for 2011/12 are boosted 600,000 tons to 4.4 million).

Australian barley is lowered 300,000 tons to 3.8 million because of reduced crop prospects.

Canadian barley is cut 400,000 tons to 1.3 million based on a smaller crop.

EU barley is raised 500,000 tons to 3.0 million on a larger crop and less competition from other exporters.

Selected Importers

EU corn is raised by 2.0 million tons to 5.0 million because of reduced grain supplies.

Venezuelan corn is boosted 300,000 tons to 2.0 million based on indications of strong demand from livestock producers (imports for 2011/12 are up 500,000 tons to 2.2 million).

TRADE CHANGES IN 2011/12

Large Late-Season Adjustments Reflect Reported Shipments:

Selected Exporters

Argentine corn is raised 200,000 tons to 16.7 million.

Mexican corn is up 200,000 tons to 300,000.

Ukrainian corn is up 500,000 tons to a new record 15.0 million.

Australian barley is raised 600,000 tons to 5.8 million.

Russian barley is up 200,000 tons to 3.6 million.

Ukrainian barley is boosted 200,000 tons to 2.2 million.

Argentine sorghum is raised 400,000 tons to 2.3 million.

Selected Importers

Algerian corn is boosted 200,000 tons to 3.1 million.

Chinese corn is raised 200,000 tons to 5.5 million.

Colombian corn is lowered 300,000 tons to 3.4 million (sorghum is up 150,000 tons).

Egyptian corn is up 600,000 tons to 7.1 million.

Israeli corn is raised 200,000 tons to 1.2 million.

Kenyan corn is down by 200,000 tons to 300,000.

Zimbabwean corn is up 300,000 tons to 400,000.

Saudi barley is up 500,000 tons to 8.5 million.

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