USDA Grains: World Markets and Trade
11 May 2012
USDA Grains: World Markets and Trade - May 2012
Record global corn supplies in 2012/13 are
expected to pressure prices, while less wheat
supplies support prices above corn.
Consequently, corn is expected to replace wheat
in animal feed rations in a number of countries.Global Corn Production Surges Above Consumption

Global corn production is forecast up 75 million
tons (nearly 10 percent) on the basis of record
crops in the United States, China, Brazil, and
Ukraine. Record global corn consumption is
driven primarily by China and by the United
States, where corn is being used for feed rather
than ethanol.
For wheat, lower production and less exportable
supplies from Ukraine, Kazakhstan, the EU, and
Australia are only partially offset by a larger U.S.
wheat crop. Argentine producers are shifting to
other grains, notably barley. With lower corn
prices, less wheat, including milling-quality
wheat, will be fed to animals.
Global Wheat Production Falls Below Consumption

With prospects for a huge U.S. crop, global corn
stocks are currently expected to be the largest in
over a decade. Conversely, global wheat stocks
are expected to decline for the third consecutive
year.
Record rice production and rising stocks reflect
abundant supplies, which would be expected to
pressure global prices. Government policies,
particularly in Thailand and India, will continue
to impact global market dynamics.
Record Rice Production Outpaces Consumption

WHEAT: WORLD MARKETS AND TRADE
HIGHLIGHTS FOR 2012/13
Global wheat production is projected to reach 675 million tons, down 19 million from 2011/12. Global consumption is forecast 8 million tons lower to 686 million tons as a result of a reduction in wheat used for feed. Global ending stocks are forecast to drop 11 million tons with exporter stocks comprising virtually the entire decline. It should be noted that despite reduced supplies of feed-quality wheat, milling-quality wheat supplies are ample.

Selected Importers
Global trade is projected down 8 million tons or 5 percent from 2011/12. Although demand for wheat feeding is expected to remain strong over the summer months, a drop-off is expected in the fall as new-crop corn supplies hit the market. Corn prices are projected to fall below wheat and thereby returning to a more normal price relationship as corn displaces wheat in feed rations.
Less import demand for wheat used in feeding is expected in China, Japan, South Korea, Philippines, and Vietnam. Although the EU has tighter supplies, imports are expected to drop significantly as a result of fewer quota-based import licenses available compared to last year, and tighter feedquality wheat supplies in the Black Sea region.
Mexico’s demand for wheat used in feeding is also expected to drop considerably after record imports in 2011/12.
Global Trade Drops

PRICES:
US Weekly FOB Export Bids

Domestic: Wheat prices sank over the last month in all classes other than Soft White Wheat (SWW). Hard Red Winter (HRW) dropped 12 percent to $262/ton and even dipped below SWW on reports of possible record yields. Soft Red Winter (SRW) is down 8 percent to $246/ton on ample old-crop supplies and expectations of a large U.S. corn crop. Hard Red Spring (HRS) dropped 10 percent to $333/ton as a result of ideal planting conditions and large supplies expected in Canada. SWW prices inched up slightly as old-crop supplies tighten due to higherthan- expected exports. The 2012/13 season-average farm price for all wheat is projected at $5.50-$6.70/bushel, down sharply from the record $7.25/bushel projected for 2011/12.
RICE: WORLD MARKETS AND TRADE
HIGHLIGHTS FOR 2012/13
Record global production is expected to outpace consumption in 2012/13. Stocks are rising and global trade is forecast marginally higher than this year but just shy of last year’s record. By contrast, U.S. production, stocks, and trade are expected to fall in 2012/13 as farmers switch to more profitable crops, causing U.S. prices to rise.
Exporter Ending Stocks Soar; Global Trade Steady

Over the last 7 years, stocks held by the top five exporters (Thailand, Vietnam, India, Pakistan, and the United States) more than tripled, while global trade has only risen about 20 percent. India and Thailand are driving this growth, as government policies are causing both countries to hold record stocks. These stocks are overhanging the market and could put pressure on world prices in the coming year.
Selected Exporters
- Thailand, at 8.0 million tons, is forecast to be the world’s largest exporter once again as the government releases stocks, boosting trade 1.5 million tons over 2012.
- Vietnam is steady at 7.0 million tons on a record crop and competitive prices.
- India is projected at 6.0 million tons, down 1.0 million from 2012, as traders sell stocks accumulated during the nearly 4-year ban on non-basmati exports.
- Pakistan is expected to rise 250,000 tons to 4.0 million on a larger crop.
COARSE GRAINS: WORLD MARKETS AND TRADE
Coarse Grain Production Surges, Building Stocks

OVERVIEW FOR 2012/13
Coarse grain production is forecast to soar by over 85 million tons to a record, led by a record U.S. corn crop. Argentina is expected to have significant gains in production from both corn and barley. With global coarse grain consumption climbing by just 60 million tons (largely corn for feed), stocks will grow by nearly 25 million tons.
Coarse Grain Trade Rises

The United States and Argentina account for
most of the 6 million tons of expanded coarse
grain exports. China leads the growth in
imports, primarily because of higher corn
trade, but EU, Korea, Japan, and Mexico are
also higher.
Global corn production is forecast at a record
946 million tons, up more than 75 million from
last year. Global consumption is projected to
climb over 50 million tons to a record 921
million. While the global boost in production is
largely in the United States, consumption
growth is split between U.S. and foreign
markets, particularly China. Corn used for
ethanol in the United States is unchanged from
last year and essentially flat for the third year in a row.
World corn imports are expected to grow for the second consecutive year, about half (2 million
tons) by China. The EU, Japan, and Korea also have strong growth.
Corn Ending Stocks Rebound

World barley supplies remain relatively tight, at their lowest level in 5 years. Trade is down
slightly as feed barley import demand is expected lower, mainly from Saudi Arabia. A major trade development is the emergence of Argentina as the largest exporter of barley. Argentina
continues to supply feed barley to markets in the Middle East and North Africa, which in recent
years were mostly served by Ukraine, Russia, and the EU. Exports from these countries will
again be limited by relatively tight supplies. Australian exports are forecast down on a lower
crop.
Global sorghum trade is forecast to grow sharply because of a recovery in U.S. exportable
supplies and strong demand from Mexico.
OVERVIEW FOR 2011/12
Global coarse grains are mostly unchanged for production, but trade is boosted about 1 million tons (mostly corn). China’s corn imports are raised to a record; EU is also raised, but Japan and Korea are lowered. U.S. corn exports are unchanged, and the season-average farm price is lowered slightly.
PRICES:
Corn Daily Export Bids

U.S. corn export quotes generally fell in the
first half of April and then began rising
through early May as old-crop supplies
tightened. Even so, the average price for the
month ended $5/ton lower at $277/ton.
Argentine quotes fell, doubling the discount
against U.S. prices (to $30/ton).
Brazilian corn prices for export remained
unavailable into early May.
TRADE CHANGES IN 2011/12
Selected Exporters
- Brazilian corn is boosted 1.0 million tons to 10.5 million on record production.
- Russian corn is raised 300,000 tons to a record 1.5 million due to strong demand from the EU and the region.
- South African corn is cut 500,000 tons to 1.5 million on tighter exportable supplies.
- Australian barley is raised 500,000 to 4.5 million based on an aggressive shipment pace.
- Canadian barley is up 300,000 tons to 1.3 million on pace.
- Russian barley is raised 400,000 tons to 2.7 million based on less competition from Ukraine.
- Ukrainian barley is slashed 1.1 million tons to 2.3 million as lower-than-expected new crop supplies will likely limit late-season exports.
May 2012
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