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USDA Grains: World Markets and Trade


09 February 2012

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

Black Sea countries’ wheat exports are estimated to rebound as production jumped 33 million tons, nearly 50 percent, from last year and Russia and Ukraine lifted their export restrictions.
USDA Grains: World Markets and Trade Reports

The most dramatic recovery is in Russian exports, which are estimated at a record, barring government intervention. Much of these shipments are going to Mediterranean markets where Russia and Ukraine normally have a comparative freight and logistical advantage vis-à-vis the United States.

Last year, U.S. wheat exports to North Africa and the Middle East surged as a result of the aforementioned export restrictions. For example, the United States exported nearly 4 million tons to Egypt, whereas this year U.S. exports are negligible to date. In contrast, this year Russia has already exported 5 million tons to Egypt through December, nearly half of Egypt’s estimated import demand. Meanwhile, total U.S. exports are estimated to drop nearly 30 percent, despite expanding global trade.

Black Sea Wheat Replaces US Supplies in
North Africa and Middle East


WHEAT: WORLD MARKETS AND TRADE

OVERVIEW

Global trade for 2011/12 is up marginally this month as a result of strong demand for feedquality wheat. U.S. exports are raised slightly on the continued strong pace of shipments and recent sales. Russian exports are up primarily due to the government announcement of no export restrictions for the remainder of the year. The forecast U.S. season-average farm price is raised reflecting prices received to date and remains a record.

PRICES:

US Weekly FOB Export Bids

Domestic: Prices for all wheat classes rose in January partly due to unsubstantiated rumors of Russian export curbs and weather concerns over new-crop winter wheat production in Ukraine and the EU. Soft White Wheat (SWW) surged $34 to $268/ton and Soft Red Winter (SRW) was up $19 to $272 per ton on strong demand. Hard Red Winter (HRW) was $12 higher at $304 per ton, and Hard Red Spring (HRS) was up $14 to $367 per ton.

TRADE CHANGES IN 2011/12

Selected Importers

  • Saudi Arabia is raised 300,000 tons to 2.3 million due to purchases of feed-quality wheat.
  • Mexico is up 200,000 tons to 4.2 million reflecting strong demand for feed-quality wheat from the United States.

Selected Exporters

  • Argentina is boosted 500,000 tons to 9.7 million with additional export licenses issued.
  • Brazil is doubled to 1.0 million tons based on January shipments to Africa and reports of sales to the EU.
  • Canada is lowered 500,000 tons to 17.5 million on account of increased competition with the United States and South America.
  • India is down 300,000 tons to 700,000 due to the lack of competitiveness with Black Sea countries.
  • Russia is raised 1.0 million tons to a record 20.5 million, on account of the strong export pace and the government announcement of no export curbs for the remainder of the trade year.
  • Ukraine is reduced 1.0 million tons to 6.0 million on the slow export pace and missed sales of feed-quality wheat to the EU.
  • United States is raised 500,000 tons to 25.5 million on recent sales of Soft Red and Soft White Winter wheat to Mexico and South Korea which will likely be used in livestock and poultry feeding.

RICE: WORLD MARKETS AND TRADE

OVERVIEW

Global trade is up from last month on strong and unexpected demand from Egypt. Larger Indian exports are forecast to more than offset reductions in Thailand and Vietnam. Global stocks remain high as production outpaces consumption. U.S. exports were adjusted slightly lower.

FEATURE

A confluence of unusual events gives the three major rice exports similar market share. Thailand’s exports are forecast to drop as their paddy pledging scheme is driving up domestic quotes. Conversely, Indian exports surged due to the recent lifting of its export ban on non-basmati rice, huge stocks, and low prices. Vietnam exports remain steady compared to India and Thailand.

Export Market Shares Converge

SELECTED TRADE CHANGES FOR 2012

Selected Exporters

  • India is boosted 1.5 million tons to 6.0 million on large exportable supplies.
  • Thailand is dropped 500,000 tons to 6.5 million on uncompetitive prices and lower demand for Thai exports.
  • Vietnam is down 200,000 tons to 6.5 million on increased competition from India.

Selected Importers

  • Egypt is raised 480,000 tons to 500,000 on government purchases of foreign rice in lieu of higher priced domestic supplies.

COARSE GRAINS: WORLD MARKETS AND TRADE

OVERVIEW

Global coarse grains trade for 2011/12 is boosted 1.4 million tons, largely because of higher EU corn imports. World production is lowered on Argentine corn crop prospects. U.S. corn exports are boosted although the U.S. corn season-average farm price is unchanged.

PRICES

U.S. corn export quotes rose slightly throughout the past month based on growing concerns over the Argentine crop. Prices ended at $283/ton, $20/ton higher than at the time of the January WASDE release. The discount between U.S. and Argentine prices has narrowed by about $10/ton throughout the past two months.

Corn Daily Export Bids

TRADE CHANGES IN 2011/12

Selected Exporters

  • U.S. corn is boosted 1.5 million tons to 43.5 million based on reduced competition from Argentina.
  • Argentine corn is slashed by 3.5 million tons to 14.0 million because of sharply lower new crop prospects caused by drought and extreme heat.
  • Brazilian corn is boosted 500,000 tons to 9.0 million because of reduced Argentine competition and better prospects for second-crop (winter) corn.
  • EU corn is raised 500,000 tons to 2.5 million due to stronger licenses.
  • Russian corn is raised 200,000 tons to 1.2 million based on strong early-season shipments.
  • South African corn is lowered 300,000 tons to 3.0 million as old-crop supplies of yellow corn tighten and the country becomes less competitive. (Imports are boosted 200,000 tons to 300,000.)
  • Ukrainian corn is raised 2.0 million tons to 14.0 million as loadings take priority over wheat and barley (both lowered this month).
  • Argentine barley is boosted 500,000 tons to a record 2.9 million based on record production and reported large shipments of barley to Saudi Arabia.
  • Canadian barley is raised 300,000 tons to 1.0 million due to a strong export pace through January.
  • EU barley is up 300,000 tons to 2.8 million on export licenses.
  • Kazakh barley is up 300,000 tons to 550,000 on reports of large shipments through December.
  • Russian barley is up 300,000 tons to 2.3 million based on exports to date.
  • Ukrainian barley is cut 1.0 million tons to 3.4 million on sluggish exports and strong competition from Argentina.
  • Argentine sorghum is lowered 300,000 tons to 2.0 million on a smaller crop caused by adverse weather conditions.

Selected Importers

  • Brazilian corn is up 300,000 tons to 800,000 because of strong early-season shipments from Paraguay.
  • Canadian corn is cut 400,000 tons to 1.0 million based on stocks data that implies weak demand.
  • EU corn is raised 1.0 million tons to 4.0 million on larger-than-expected licenses.
  • Saudi barley is up 300,000 tons to 7.5 million based on reported large shipments from Argentina.
  • EU barley is raised 250,000 tons to 350,000 based on import licenses to date.
  • Chilean sorghum is lowered 200,000 tons to 600,000 on less exportable supplies available from Argentina.

February 2012

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