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USDA Grains: World Markets and Trade


13 June 2012

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

Exporter ending stocks in 2012/13 are forecast to be the lowest in 4 years, dropping 8.3 million tons from last year.
USDA Grains: World Markets and Trade Reports

Wheat Exporter Stocks Continue to Decline

Carry-in stocks held in Argentina, Australia, Kazakhstan, and the United States are all lowered this month as a result of record global demand last year. Reduced crop prospects in both Russia and the United States are also contributing to the tightening stock situation.

Black Sea exports are expected to meet nearly 20 percent of import demand this year. However, production for the region is projected 20 million tons lower than last year (20 percent) with a corresponding tightening of exportable supplies. If faced with further reductions in output, Russia and Ukraine could limit exports, as they have done in two out of the past 5 years. Exportable supplies in Argentina, Australia, and the EU are also forecast to be tight.

In contrast, exportable supplies in the United States are abundant. U.S. ending stocks account for about a third of total major exporter stocks. Therefore, the United States stands to gain additional market share if further tightening occurs in competitor supplies.

[For All Grain Summary Comparison, please download the document]

Wheat: World Markets and Trade

Overview

Global production for 2012/13 is down 5.7 million tons and trade is down slightly. Although U.S. exports are unchanged this month, a reduction in Russian exports is partially offset by an increase in India. U.S. exports are raised slightly in 2011/12. The season-average U.S. farm price is raised slightly to $5.60-6.80 per bushel.

Prices:

Domestic: Wheat prices were quite volatile over the past month. Concerns that winter wheat yields would suffer as a result of hot and dry conditions sparked a price rally, although prices have fallen from their mid-month highs. Hard Red Winter (HRW) rose $18 to $280/ton, but is down from the $299/ton peak. Other wheat classes, Hard Red Spring (HRS), Soft Red Winter (SRW), and Soft White Winter (SWW) were nearly unchanged.

Trade Changes in 2012/13

Selected Exporters

  • India is doubled to 3.0 million as market conditions improve private sector export prospects.
  • Russia is cut 2.0 million tons to 16.0 million because of reduced crop prospects.
  • Turkey is lowered 300,000 tons to 3.7 million on a lower crop.

Selected Importers

    Indonesia is cut 300,000 tons to 6.8 million on lowered expectations on the timing of new flour mill operations.

Trade Changes in 2011/12

Selected Exporters

  • Argentina is boosted 300,000 tons to 10.8 million on stronger-than-expected shipments to North Africa.
  • Australia is up 500,000 tons to 22.0 million based on a strong pace.
  • EU is down 300,000 tons to 16.2 million as a result of reduced competitiveness in traditional North African markets.
  • India is raised 450,000 tons to 1.2 million on reported shipments to the Middle East.
  • Kazakhstan is raised 500,000 tons to a record 10.0 million on continued strong shipments of grain and flour.
  • Pakistan is cut 500,000 tons to 300,000 on lower-than-expected shipments.
  • Turkey is lowered 300,000 tons to 3.7 million due to a sluggish pace.
  • United Arab Emirates is raised 400,000 tons to 700,000 on expected stronger flour exports as indicated by larger wheat imports.
  • United States is raised 700,000 tons to 28.2 million on strong late-season shipments.

Selected Importers

  • Bangladesh is cut 700,000 tons to 1.7 million reflecting shipments to date.
  • Egypt is raised 500,000 tons to a record 11.0 million as a result of larger-than-expected imports by the private sector.
  • Indonesia is down 300,000 tons to 6.4 million due to a sluggish pace.
  • Mexico is up 300,000 tons to a record 5.1 million based on a strong import pace and continued purchases of U.S. wheat for feeding.
  • Morocco is raised 300,000 tons to 3.5 million in order to boost supplies as a result of lower 2012/13 crop prospects.
  • South Africa is up 300,000 tons to 1.7 million on a stronger-than-expected pace.
  • Turkey is raised 300,000 tons to 3.5 million on strong late-season imports of Russian wheat.
  • United Arab Emirates is up 400,000 tons to a record 1.6 million.
  • Uzbekistan is boosted 300,000 tons to 2.3 million on continued strong imports of wheat and flour from Kazakhstan.

Rice: World Markets and Trade

Overview

Despite record global production in 2012/13, ending stocks are forecast down marginally from 2011/12. Consumption is expected to outpace production for the first time in 6 years as India continues to export some of its massive holdings. Global trade is expected to rise slightly in 2013 but fall short of the 2011 record. U.S. production, stocks, and trade are expected to drop in 2012/13 as farmers switch to more profitable crops, causing U.S. prices to rise.

Feature

In recent weeks, the gap between Thai prices and all others has widened. Quotes for Thai 100B have risen $10 per ton while quotes for 5% from Vietnam and India have fallen $20 and $40 per ton, respectively. Thailand’s paddy pledging program, geared towards keeping prices high for farmers, has greatly eroded its global market share, causing the country to slip to number three after nearly 5 decades as the top exporter.

Trade Changes

Selected Exporters

  • India, up 1.0 million tons to a record 8.0 million, is forecast to be the world’s top exporter in 2012 for the first time. Massive stocks and another large crop are expected to keep India exporting in 2013. The projection is up 500,000 tons to 6.5 million.
  • Pakistan is raised 214,000 tons to 3.4 million on final 2011 trade data.
  • United States is up 100,000 tons to 3.4 million in 2012 on strong sales and food aid.

Selected Importers

  • Bangladesh is cut 250,000 tons to 400,000 on the pace of imports in 2012.
  • Iran is raised 520,000 tons to 1.5 million in 2010 on new data and boosted 350,000 tons for 2012 and 2013 to 1.9 million and 2.0 million tons, respectively, on rising demand.
  • South Africa is bumped up 150,000 tons to 900,000 on the pace of 2012 shipments.

Coarse Grains: World Markets and Trade

Overview

Global corn trade for 2012/13 is up this month with larger supplies in Brazil and Russia. U.S. corn exports and season-average farm price are unchanged for 2012/13; exports are lowered for 2011/12.

Prices

U.S. corn export quotes were volatile, shedding over $40/ton following May’s WASDE but recovering half of that by June 6th, to finish at $267/ton. Argentine quotes followed suit, maintaining a $30/ton discount against U.S. corn.

Brazilian prices, however, are deeply discounted against U.S. corn and have gone down relative to Argentine corn over the last month.

Trade Changes in 2012/13

Selected Exporters

  • Brazilian corn is boosted 1.0 million tons to 11.5 million based on expectations for a record winter-crop harvest in 2012.
  • Russian corn is tripled to 1.5 million tons based on prospects for a record crop.

Selected Importers

  • EU corn is up 1.0 million tons to 7.0 million based on greater exportable supplies from Brazil, larger global production (lower prices), and a smaller domestic wheat crop.
  • Indonesian corn is up 500,000 tons to 2.0 million on larger global production (lower prices).

Trade Changes in 2011/12

Selected Exporters

  • U.S. corn is cut 1.0 million tons to 42.5 million based on anemic sales and shipments in recent months.
  • Argentine corn is up 500,000 tons to 14.5 million with strong new-crop shipments, despite a smaller harvest.
  • Brazilian corn is cut 500,000 tons to 10.0 million on slow new-crop shipments (but 2012/13 exports are boosted).
  • EU corn is raised 200,000 tons to 2.7 million based on export licenses.
  • Russian corn is up 500,000 tons to a record 2.0 million on account of recent trade data.
  • Argentine barley is up 300,000 tons to 3.3 million reflecting sales to date.
  • Russian barley is raised 200,000 tons to 2.9 million supported by strong shipments in recent months.
  • U.S. sorghum is down 250,000 tons to 1.4 million based on very slow shipments and sales, as old-crop supplies dwindle.

Selected Importers

  • Iranian barley is up 300,000 tons to 1.1 million on the pace of shipments.
  • EU corn is up 500,000 tons to 5.5 million based on import licenses.
  • Mexican sorghum is cut 200,000 tons to 1.1 million on slow trade.

June 2012

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