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USDA Grains: World Markets and Trade


12 December 2012

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


USDA Grains: World Markets and Trade Reports

India’s Wheat Exports Fill Supply Gap

India is seizing the opportunity to export record quantities of competitively priced wheat. As global exportable supplies tighten, particularly from Russia and Ukraine, India’s wheat is effectively replacing Black Sea wheat in several Middle East and East African countries. It is also replacing Australian wheat (milling and feed-quality) in Asian markets, and even displacing Turkish wheat flour in Indonesia.

Ironically, India had a wheat export ban prior to September 2011, but now it is saddled with burdensome stocks and inadequate storage facilities. The government is now permitting limited exports from its huge reserve stocks. Further export increases from India are expected to be constrained by transportation bottlenecks and limited port capacity.

Wheat: World Markets and Trade

Overview

Global wheat production for 2012/13 is raised due to larger crops in Australia, Canada, and China. Global trade is boosted primarily on higher demand from Brazil, China, Iran, and Russia. U.S. exports are cut on account of greater competition from Australia, the EU, and South America. The midpoint of the season-average U.S. farm price is lowered $0.10 to $8.00/bushel.

Prices

US Weekly FOB Export Bids

Domestic: Wheat prices for all classes were slightly lower in November. Although 2013 crop conditions continue to deteriorate, Hard Red Winter (HRW) prices were down $6/ton to $372. Hard Red Spring (HRS) was down $10/ton to $374, Soft Red Winter (SRW) dipped $2/ton to $343, and Soft White Winter (SWW) was down $3/ton to $336.

Trade Changes in 2012/13

Selected Exporters

  • Australia is up 500,000 tons to 19.5 million because of larger crop expectations.
  • EU is raised 500,000 tons to 18.0 million due to growing competitiveness and increased sales to North Africa and the Middle East.
  • India is boosted 500,000 tons to a record 7.5 million, as a result of the strong pace of shipments to date, and additional wheat made available from government stocks.
  • Paraguay is up 500,000 tons to 1.6 million as a result of the strong shipment pace.
  • United States is cut 1.0 million tons to 29.5 million owing to slow sales and shipments to date and increased foreign competition.

Selected Importers

  • Brazil is up 500,000 tons to 7.5 million resulting from a smaller, poor-quality crop.
  • China is boosted 500,000 tons to 3.0 million attributable to recent purchases and strong deliveries to date.
  • Iran is raised 500,000 tons to 2.5 million as a result of the strong pace of deliveries.
  • Russia is up 500,000 tons to 1.5 million on expected imports from Kazakhstan.
  • Turkey is cut 500,000 tons to 3.5 million as the strong early-season purchases are expected to taper off as Russian exports dwindle.

Rice: World Markets and Trade

Overview

Global rice production in 2012/13 is forecast at a record and essentially on par with the previous year. Consumption continues to climb to new record levels. Stocks are forecast down but still at the second highest level in a decade. Trade is forecast at comparable levels to 2010/11. U.S. production and trade are up from the previous year.

Feature

Expanding Import Demand Not Production Driven

In 2012, changes in policies and prices, as opposed to production shortfalls, have helped global rice trade to rise to a new record of 38.5 million tons.

In the case of Nigeria, traders reacted to the announced imposition of future higher import levies by stockpiling. The levies are designed to protect and stimulate domestic production in response to the government’s declared goal of self-sufficiency.

China quadrupled imports to become the second-largest importer, a massive leap from the eighteenth position in 2011. Despite record production in China, rising demand has helped make Vietnamese imports more competitively priced in southern China.

Selected Trade Changes

  • Vietnamese exports are up 300,000 tons to a record 7.5 million in 2012 on the pace of shipments. Vietnamese imports are halved to 200,000 tons in 2013 as relative prices reduce the demand for Cambodian rice.
  • Iranian imports are down 150,000 tons to 1.8 million in both 2012 and 2013.
  • Iraqi imports are up 100,000 tons to 1.4 million in 2012 on account of higher shipments, especially from Thailand.

Coarse Grains: World Markets and Trade

Overview

Global corn production is up, mainly due to a larger crop in China. Global corn trade is boosted nearly 1.5 million tons this month, and 4.0 million tons over the past 2 months, largely on higher import demand from the EU. Despite slow sales and shipments, U.S. corn exports remain unchanged. The season-average farm price is again projected lower from last month (although it remains a record) on strong early-season marketings at relatively lower prices.

Prices

Corn export quotes for all major suppliers rose since the release of USDA’s November WASDE report. U.S. quotes are up over $8/ton to $330, despite sluggish sales, due in part to a strong basis as a result of low water levels in the Mississippi River which have been restricting barge traffic. In recent days, however, prices have eased on continued weak sales. Since reaching lows in late September, South American quotes have been rising steadily and have gained over 15 percent to about $300/ton, but remain $30/ton cheaper than U.S.

Corn Daily Export Bids

Trade Changes in 2012/13

Selected Exporters

  • Canadian corn is raised 500,000 tons to 1.5 million because of a substantial boost to exportable supplies (larger crop).
  • Paraguayan corn is up 200,000 tons to 1.6 million on account of robust early-season shipments.
  • Russian corn is raised 500,000 tons to a record 2.3 million based on greater exportable supplies and strong demand, especially from the EU.
  • South African corn is up 200,000 tons to 2.5 million with greater exportable supplies (2011/12 crop, harvested May 2012).
  • Russian barley is boosted by 200,000 tons to 2.2 million on strong early-season shipments.
  • Argentine sorghum is raised 200,000 tons to 2.6 million on stronger demand from Colombia. (Colombian imports are raised 200,000 tons to 600,000).

Selected Importers

  • EU corn is boosted sharply by 1.5 million tons again this month to 8.0 million based on the pace of import licenses in response to tighter supplies of other feed grains.

Endnotes to Grain: World Markets and Trade

Regional Tables

North America: Canada, Mexico, the United States.

Central America: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama.

Caribbean: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Cuba, Dominica, Dominican Republic, French West Indies, Grenada, Guadeloupe, Haiti, Jamaica and Dep, Leeward-Windward Islands, Martinique, Montserrat, Netherlands Antilles, Puerto Rico, Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, Turks and Caicos Islands, Virgin Islands of the U.S.

South America: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Falkland Islands (Islas Malvinas), French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela.

EU: Austria, Belgium/Luxembourg, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

Other Europe: Albania, Azores, Bosnia and Herzegovina, Croatia, Former Yugoslavia, Gibraltar, Iceland, Macedonia, Montenegro, Norway, Serbia, Switzerland.

Former Soviet Union: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan.

Middle East: Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen.

North Africa: Algeria, Egypt, Libya, Morocco, Tunisia.

Sub-Saharan Africa: all African countries except North Africa.

East Asia: China, Hong Kong, Japan, South Korea, North Korea, Macau, Mongolia, Taiwan.

South Asia: Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka, Maldives.

Southeast Asia: Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam.

Oceania: Australia, Fiji, New Zealand, Papua New Guinea.

Other Notes

Local Marketing Years (LMY): LMY refers to the 12-month period at the onset of the main harvest, when the crop is marketed (i.e., consumed, traded, or stored). The year first listed begins a country's LMY for that commodity (2011/12 starts in 2011); except for summer grains in certain Southern Hemisphere countries and for rice in selected countries, where the second year begins the LMY (2011/12 starts in 2012). Key exporter LMY’s are:

Stocks: Unless otherwise stated, stock data are based on an aggregate of differing local marketing years and should not be construed as representing world stock levels at a fixed point in time.

Consumption: World totals for consumption reflect total utilization, including food, seed, industrial, feed, and waste; as well as differences in local marketing year imports and local marketing year exports. Consumption statistics for regions and individual countries, however, reflect food, seed, industrial, feed, and waste only.

Trade: All PSD tables are balanced on the different local marketing years. All trade tables contain Trade Year (TY) data which puts all countries on a uniform, 12-month period for analytical comparisons: wheat is July/June; coarse grains, corn, barley, sorghum, oats, and rye are Oct/Sept; and rice is calendar year.

EU Consolidation: The trade figures starting from 1999/00 represent EU-27 and exclude all intra-trade. For the years 1960/61 through 1998/99, figures are the EU-15 and also exclude all intra-trade. EU-15 member states' data for grains are no longer maintained in the official USDA database. Data for the individual NMS-10, plus Bulgaria and Romania, exists only prior to 1999/00.

Statistics: (1) Wheat trade statistics include wheat, flour, and selected pasta products on a grain equivalent basis. (2) Rice trade statistics include rough, brown, milled, and broken on a milled equivalent basis. (3) Coarse grains statistics include corn, barley, sorghum, oats, rye, millet, and mixed grains but exclude trade in barley malt, millet, and mixed grains.

Unaccounted: This term includes grain in transit, reporting discrepancies in some countries, and trade to countries outside the USDA database.

The Field Crops and Livestock Branch, Industry and Sector Analysis Division, Foreign Agricultural Service, USDA, Washington DC 20250, prepared this circular. Information is gathered from official statistics of foreign governments and other foreign source materials, reports of U.S. agricultural attachés and Foreign Service officers, office research, and related information. Further information may be obtained by writing the Division or telephoning (202) 720-6590.

Note: The previous report in this series was the Grain: World Markets and Trade Foreign Agricultural Service Circular FG 11-12 November 2012. For further details on world grain production, please see World Agricultural Production Foreign Agricultural Service Circular WAP 12-12 December 2012.

This circular is available in its entirety on the World Wide Web via the Foreign Agricultural Service Home Page. The address is: http://www.fas.usda.gov

December 2012

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