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USDA Grains: World Markets and Trade


15 January 2013

USDA Grains: World Markets and Trade - January 2013USDA Grains: World Markets and Trade - January 2013


USDA Grains: World Markets and Trade Reports

Competitors Aggressively Outsell U.S. Corn

Corn Exports by Calendar Quarter

US Exports Plummet, Competitors’ Boosted

Recent quarterly shipment data show U.S. corn exports dropping to the lowest level in at least 2 decades. South American shipments, Brazilian in particular, have tripled even in the face of new-crop U.S. supplies.

Drought-reduced production drove up U.S. prices at the same time that key competitors had record or near-record supplies. Simultaneously, early Brazilian soybean shipments and a smaller crop provided port availability to boost corn exports. Black Sea (mostly Ukrainian) corn has been competitively priced, making its way to traditional U.S. markets such as South Korea and Japan. The tailing-off of wheat exports from the Black Sea should provide traders with ample port capacity in the months ahead to execute sales.

Consequently, U.S. corn exports for the year are poised to drop to the lowest level in over 40 years, falling below wheat exports. Competitor trade has contributed to U.S. exports crashing by nearly 60 percent in just 5 years, despite world demand trending higher.

Since late November, U.S. prices have shed about $1.00 per bushel (nearly $40 per ton) and are now competitive against South American and Ukrainian prices. U.S. export sales (and shipments) are expected to surge in coming months given strong global demand and constraints on South American infrastructure.

Wheat: World Markets and Trade

Overview

Global wheat production for 2012/13 is cut slightly as a result of a smaller crop in Argentina and Russia. Global trade is raised slightly and U.S. exports are unchanged. The season-average U.S. farm price is lowered, but is still projected to be a record.

Prices

US Weekly FOB Export Bids

Domestic: Wheat prices for all classes fell sharply in December primarily due to sluggish export sales and falling corn prices. Hard Red Winter (HRW) prices dropped $30 to $340/ton in spite of poor weather conditions for the 2013 crop. Hard Red Spring (HRS) sank $35 to $346/ton, Soft Red Winter (SRW) plunged $34 to $309/ton, and Soft White Winter (SWW) slid $18/ton to $318.

Trade Changes in 2012/13

Selected Exporters

  • Australia is lowered 500,000 tons to 19.0 million on slowing shipments and uncompetitive prices.
  • Canada is trimmed 500,000 tons to 18.5 million as a result of slower-than-expected shipments to date.
  • India is up 500,000 tons to 8.0 million as sales from government stocks are expected to pick up.
  • Russia is raised 500,000 tons to 10.5 million on the strong shipment pace.
  • Ukraine is up 200,000 tons to 6.2 million as a result of the government’s intention to sell additional wheat from state reserves.

Selected Importers

  • Iran is up 200,000 tons to 2.7 million attributable to strong deliveries to date.

Rice: World Markets and Trade

Overview

Record global rice production and consumption for 2012/13 are virtually unchanged from last month. Stocks are down marginally as consumption is expected to outpace production. Trade is revised up but still below the previous year’s record.

Feature

Thai Exports Plummet as Price Spread Expands

As the world’s largest rice exporter, Thailand drove global prices for 3 decades. This changed in 2012 when India took advantage of high Thai prices and began to export the massive stocks accumulated during a 4-year ban on non-basmati exports. India quickly rose to the number one exporter and driver of global prices for the first time ever. Competitors in Asia, such as Vietnam, followed India’s lead down, greatly undercutting Thai prices. As the price spread widened, Thai exports plummeted, dropping 35 percent from 2011.

Trade Changes

Selected Exporters

  • India is boosted 250,000 tons to a record 10.3 million in 2012 and hiked 1.0 million tons to 7.5 million in 2013 as strong shipments are expected to continue, especially to West Africa.
  • Vietnam is up 200,000 tons to a record 7.7 million in 2012 on trade data and boosted 400,000 tons to 7.4 million in 2013 on the expectation that sales will remain strong.
  • Thailand is raised 400,000 tons to 6.9 million in 2012 on near-final data. Despite the increase, this is the lowest tonnage since 2000.
  • Pakistan is cut 250,000 tons in 2012 and 200,000 tons in 2013 to 3.5 and 3.8 million respectively on a smaller basmati crop and competition from India.
  • Cambodia is down 125,000 tons to 825,000 in 2013 on lower production and competition from Vietnam.
  • Argentina is up 125,000 tons to 650,000 in 2013 on expectations of higher production.
  • China is dropped 140,000 tons to 260,000 in 2012 on near-final shipment data. This is the lowest quantity since 1995.

Selected Importers

  • Nigeria is boosted 200,000 tons to a record 3.4 million in 2012 on shipment data and hiked 450,000 tons to 2.7 million in 2013 as the higher duty is now expected to have less of an impact than originally thought.
  • Cote d’Ivoire is up 150,000 tons to a record 1.5 million in 2012 and 200,000 tons to 1.2 million in 2013 as stability and rising consumption keep demand high.
  • Senegal is elevated 180,000 tons to 1.0 million in 2013 on continued purchases from India.
  • Ghana is raised 125,000 in 2012 and 200,000 in 2013 to 600,000 in both years on the expectation that large purchases will continue.

Coarse Grains: World Markets and Trade

Overview

Global corn production is up because of a larger crop estimate for the United States and higher forecasts for Brazil, Paraguay, and Argentina. Global corn trade is nearly unchanged. U.S. corn exports are slashed on indications of strong domestic use, slow export sales, and strong competition from South America. The season-average farm price is unchanged.

Prices

While corn export quotes for all major suppliers have fallen since the release of USDA’s December WASDE report, the gap between quotes for major exporters has narrowed substantially. U.S. quotes tumbled more than $20/ton to $295, putting them below Black Sea quotes at $300/ton. In the last half of the month, South American quotes have risen to $285/ton.

Corn Daily Export Bids

Trade Changes in 2012/13

Selected Exporters

  • U.S. corn is cut by 5.0 million tons to 26.0 million, the lowest in over 40 years, on indications of strong domestic use, and slow export sales and shipments.
  • Argentine corn is raised by 2.0 million tons to a record 19.5 million because of strong shipments of last year’s crop and a larger forecast for the new crop.
  • Brazilian corn is up 1.5 million tons to a record 22.5 million on greater production prospects and diminished U.S. competition.
  • EU corn is doubled to 1.0 million tons on the pace of export licenses.
  • Paraguayan corn is boosted by 800,000 tons to a record 2.4 million on strong earlyseason shipments.
  • EU barley is raised by 200,000 tons to 3.5 million based on the strong pace of export licenses.
  • U.S. sorghum is cut 1.1 million tons to 1.4 million, the lowest in the USDA database, on indications of strong domestic demand.
  • Argentine sorghum is raised 400,000 tons to 3.0 million as a result of less competition from the United States.

Selected Importers

  • Mexican sorghum is lowered by 700,000 tons to 1.5 million on sharply lower U.S. exportable supplies.

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:

Wheat Corn Barley Sorghum
Argentina (Dec/Nov) Argentina (Mar/Feb) Australia (Nov/Oct) Argentina (Mar/Feb)
Australia (Oct/Sep) Brazil (Mar/Feb) Canada (Aug/Jul) Australia (Mar/Feb)
Canada (Aug/Jul) China (Oct/Sep) EU-27 (Jul/Jun) United States (Sep/Aug)
China (Jul/Jun) South Africa (May/Apr) Russia (Jul/Jun)
EU-27 (Jul/Jun) United States (Sep/Aug) Ukraine (Jul/Jun)
India (Apr/Mar) United States (Jun/May)
Kazakhstan (Jul/Jun)
Russia(Jul/Jun)
Turkey (Jun/May)
Ukraine (Jul/Jun)
United States (Jun/May)

For a complete list of local marketing years, please see the FAS website (http://www.fas.usda.gov/psdonline/psdAvailability.aspx).

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.

January 2013

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