USDA Grains: World Markets and Trade
08 February 2013
USDA Grains: World Markets and Trade February 2013
Brazil is poised to knock the United States out of its historical position as the world’s largest
corn exporter due to a confluence of developments: successive bumper harvests, reduced
domestic use, available export capacity, and high U.S. corn prices fueled by the historic 2012
drought.
Brazilian farmers responded to elevated corn prices by expanding planted area in 2011/12,
which resulted in a record crop last season. The current crop is also expected to be a bumper
harvest. Meanwhile, there is reportedly less corn demand from the domestic poultry sector,
further augmenting exportable supplies. Exports have also benefited insofar as soybeans
were exported early last year, freeing up the transportation infrastructure for corn. Over the
past 4 months, Brazil has exported nearly 14 million tons, more than double U.S. shipments
over the same period.
The United States has slowly lost its global export market share, from a high of 84 percent in
1979/80 to a projected 25 percent for 2012/13– the smallest share in the USDA database
(1960/61). Despite sluggish export sales and shipments, U.S. prices are still uncompetitive.
Huge plantings expected in 2013/14 combined with normal weather should enable the United
States to be more competitive next year.
WHEAT: WORLD MARKETS AND TRADE
OVERVIEW
Global wheat production for 2012/13 is cut slightly as a result of smaller crops in Brazil and Kazakhstan. Global trade is down slightly. Indian exports are raised again this month to a new record as shipments and sales remain strong. U.S. exports are cut this month on expectations of slower shipments at the end of the trade year. The season-average U.S. farm price is unchanged.
PRICES:
Domestic: Wheat prices for all classes were up in January. Poor weather conditions persist in Hard Red Winter (HRW) growing areas. HRW and Soft Red Winter (SRW) prices rose $4 to $344/ton and $3 to $312/ton, respectively. Hard Red Spring (HRS) climbed $18 to $364/ton. Soft White Winter (SWW) jumped $16 to $334/ton, as supplies tighten.
TRADE CHANGES IN 2012/13
Selected Exporters
- Brazil is lowered 300,000 tons to 1.2 million resulting from a smaller crop.
- EU is up 500,000 tons to 18.5 million as strong licenses and sales continue.
- India is boosted 500,000 tons to a record 8.5 million based on shipment pace and reported sales from government stocks.
- Kazakhstan is down 500,000 tons to 6.5 million with a smaller crop.
- United States is cut 500,000 tons to 29.0 million on expectations of slower shipments at the end of the trade year.
Selected Importers
- Iran is up 300,000 tons to 3.0 million due to larger-than-expected deliveries.
- Morocco is down 500,000 tons to 4.0 million on larger-than-expected domestic supplies.
- Saudi Arabia is lowered 300,000 tons to 2.0 million due to reduced exportable supplies from the Black Sea region.
- South Korea is boosted 600,000 tons to 5.0 million as feed-quality wheat deliveries from India are accelerating.
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