World Grain Situation
Trends, Conditions and
Outlook
CNASParr Rosson
Professor & Director
Center for North American Studies
Department of Agricultural Economics
Texas A&M University
Overview
World Supply/Demand Balance
Major Producers & Consumers
Market Conditions Affecting the Major
Grain Traders
Prices
World Macroeconomic Conditions
Indicator 2003 2004 2005 2006
Real Growth (% CH)
World 2.4 3.8 3.0 3.1
Asia/NIC/Emerging * 6.4 7.4 6.6 6.4
Latin America 1.3 5.8 4.3 4.4
Eurozone 0.5 1.9 1.3 1.8
Countries
United States 3.0 4.4 3.6 3.0
Canada 2.0 2.8 2.6 3.0
United Kingdom 2.2 3.1 2.5 2.3
Japan 1.4 2.6 1.0 2.0
China 9.1 9.5 9.0 8.3
India 7.3 7.1 7.2 6.5
World Wheat Supply and Demand
Source: Grain: World Markets and Trade, FAS/USDA
1980 1985 1990 1995 2000 20050
100
200
300
400
500
600
700MMT
0
50
100
150
200
250Million HA/T rade MMT
Area Harvested Production World T rade Consumption
World Rice Supply and Demand
Source: Grain: World Markets and Trade, FAS/USDA
1980 1985 1990 1995 2000 20050
100
200
300
400
500
600
700MMT
0
20
40
60
80
100
120
140
160
180Million HA/T rade MMT
Area Harvested Production World T rade Consumption
World Corn Supply and Demand
Source: Grain: World Markets and Trade, FAS/USDA
1980 1985 1990 1995 2000 20050
200
400
600
800MMT
0
20
40
60
80
100
120
140
160Million HA/T rade MMT
Area Harvested Production World T rade Consumption
World Barley Supply and Demand
Source: Grain: World Markets and Trade, FAS/USDA
1980 1985 1990 1995 2000 20050
50
100
150
200MMT
0
20
40
60
80
100Million HA/T rade MMT
Area Harvested Production World T rade Consumption
Wheat Production & ConsumptionAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
379.6357.5
Production Consumption0.0
100.0
200.0
300.0
400.0
500.0MMT
United States China India Russia EU-25
Rice Production & ConsumptionAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
286.9299.2
Production Consumption0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0MMT
China India Indonesia Vietnam Bangladesh
Corn Production & ConsumptionAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
484.6449.7
Production Consumption0.0
100.0
200.0
300.0
400.0
500.0
600.0MMT
United States China Mexico Brazil EU-25
World Wheat TradeAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
United States
25.3%
EU-25
13.5%
Argentina
8.8%
Australia
13.5%
Canada
13.0%
Other
25.9%
27.514.7
9.6
14.7
14.228.2
EU-25
8.5%
Brazil
5.6%Egypt
6.5% Japan
5.2%Algeria
4.3%
Other
69.8%
9.3
6.1
7.15.7 4.7
76.2
Exports 108.7 MMT
Imports 108.7 MMT
Iraq Wheat Supply and Demand
Source: Production, Supply and Demand, www.fas.usda.gov/psd/
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Area
Harvested
(1000 HA)
1220 1800 1800 1800 1800
Production 650 1800 2000 2200 2200
Imports 2801 1579 1925 2800 3300
Beginning
Stocks2200 2000 1500 300 0
Supply 5651 5379 5425 5300 5500
Feed
Consumption0 200 750 800 700
Non-Feed
Consumption3651 3679 3975 4500 4500
Exports 0 0 400 0 0
Demand 3652 3879 5125 5300 5200
Ending Stocks 2000 1500 300 0 300
1,000 MT
Former Soviet Union Wheat Situation
96.9100.3
59.7
87
2002 2003 2004 20050
20
40
60
80
100
120
Million Metric T ons
Production
Stocks
(Russia, Kazakhstan, Ukraine)
Former Soviet Union Wheat Exports
25.7
7.8
14.8
18.7
2002 2003 2004 2005 F0
5
10
15
20
25
30
Million Metric T ons
(Russia, Kazakhstan, Ukraine)
Wheat Market Overview
Former Soviet Union Re-emerging As Wheat Exporter
Improved Rail & Port Infrastructure in Kazakhstan Stimulate Exports
Argentine Exports Expected to Decline Due to Short Crop from Dry Weather
China’s Imports Drop Due to Excellent Crop
U.S. Weekly Wheat Export Prices(Gulf Ports)
$152$150$153
$148 $150 $148 $149 $151 $149$151
$142$138
$133$138 $140
$132 $132
$138
$130$130
5/27 6/3 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29$80
$100
$120
$140
$160
$180
No. 2 SRW No. 1 HRW
$/Metric Ton
World Rice TradeAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
India
16.7%
Vietnam
14.4%Pakistan
7.0%
Thailand
30.7%
United States
12.6%
Other
18.5%
4.5
3.91.9
8.3
3.4
5
Indonesia
7.0%
Nigeria
5.9%
Philippines
5.2%
Saudi Arabia
4.4% EU-25
4.1%
Other
73.4%
1.9
1.6
1.4
1.21.1
19.9
Exports27.1 MMT
Imports27.1 MMT
Iraq, 1 MMT
Iraq Rice Supply and Demand
Source: Production, Supply and Demand, www.fas.usda.gov/psd/
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Area Harvested
(1000 HA)3 12 28 50 50
Product ion 26 26 50 101 101
Imports 1178 672 889 1000 1200
Beginning
Stocks- - - - -
Supply 1645 1239 1022 1067 1317
Consumption 1095 1139 1022 1017 1067
Exports 0 0 0 0 0
Demand 1095 1139 1022 1017 1067
Ending Stocks 550 100 0 50 250
1,000 MT
Rice Market Overview
Thailand is the World’s Leading Exporter
More Competition from Vietnam & India
Growing in Importance
Indonesia a Major Importer
Growing Demand in Cuba, Nigeria & Saudi
Arabia
China Currency Strengthening Likely to
Increase Asian Rice Prices
World Rice Prices
20
00
20
01
20
02
8/2
003
1/2
004
8/2
004
1/2
005
8/2
005
$0
$100
$200
$300
$400
$500
Thai, FOB Bangkok U.S., FAS Gulf Ports FOB, Vietnam
$/Metric Ton
Source: Producers Rice Mill (producersrice.com)
World Corn TradeAverage: 2001 - 2005
Source: Grain: World Markets and Trade, FAS/USDA
United States
59.6%
China
12.2%
Brazil
4.7%EU-25
1.8%
Argentina
14.8%
Other
6.9%
45.8
9.43.61.4
11.4
5.3
Egypt
6.0%
Japan
21.8%
S. Korea
11.2%
Taiwan
6.1%
Mexico
6.9%
Other
48.0%
4.6
16.78.6
4.7
5.3
36.8
Exports76.7 MMT
Imports76.7 MMT
Iraq Corn Supply and Demand
Source: Production, Supply and Demand, www.fas.usda.gov/psd/
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Area Harvested
(1000 HA)50 50 50 50 50
Product ion 50 60 60 60 60
Imports 0 0 35 50 50
Beginning
Stocks0 0 0 0 0
Supply 50 60 95 110 110
Consumption 50 60 95 110 110
Exports 0 0 0 0 0
Demand 50 60 95 110 110
Ending Stocks 0 0 0 0 0
1,000 MT
Corn Market Overview
Recovering Demand in Latin America
Brazil, Argentina, Colombia, Peru, El Salvador
& Ecuador Experience Strong Demand Growth
Consumption Has Grown 3.4%/Year for 5
Years
Increased Animal Feeding Main Reason for
Greater Demand
Less Export Competition in Near Term
U.S. Monthly Corn Prices(No. 2 Yellow, Gulf Ports)
$103$107
$110$112$117
$120
$129$131$128
$120
$110
$95$95$93$95$97$95$93
$100
$93$95$99
Sep Dec Mar Jun Sep Dec Mar Jun
2003 2004 2005
$60
$80
$100
$120
$140
$160$/Metric T on
Iraq Barley Supply and Demand
Source: Production, Supply and Demand, www.fas.usda.gov/psd/
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
Area Harvested
(1000 HA)1200 1300 1300 1300 1300
Product ion 550 1000 1150 1250 1250
Imports 0 0 0 0 0
Beginning
Stocks37 17 82 132 82
Supply 587 1017 1232 1382 1332
Feed
Consumption100 350 400 600 600
Non-Feed
Consumption200 250 300 300 300
Exports 270 335 400 400 300
Demand 587 1017 1232 1382 1332
Ending Stocks 17 82 132 82 132
1,000 MT
Summary
World Grain Markets are Characterized as
Highly Dynamic
Wide Swings in Price
Uncertainty About Weather & Other Forces
Impacts of Exchange Rates
Influenced by Policy and Trade Restrictions
Except for Rice, World Supply/Demand for
Major Grains In Balanced
Tight S/D Balance Can Lead to Large Price
Increases & Higher Food Costs for Consumers
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