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World Grain Situation

World Grain Situation. Trends, Conditions and Outlook. Parr Rosson Professor & Director Center for North American Studies Department of Agricultural Economics Texas A&M University. Overview. World Supply/Demand Balance Major Producers & Consumers

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World Grain Situation

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  1. World Grain Situation Trends, Conditions and Outlook Parr Rosson Professor & Director Center for North American Studies Department of Agricultural Economics Texas A&M University

  2. Overview • World Supply/Demand Balance • Major Producers & Consumers • Market Conditions Affecting the Major Grain Traders • Prices

  3. World Macroeconomic Conditions

  4. 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

  5. Iraq, 1 MMT

  6. 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

  7. World Rice Prices $/Metric Ton $500 Thai, FOB Bangkok U.S., FAS Gulf Ports FOB, Vietnam $400 $300 $200 $100 $0 2000 2001 2002 8/2003 1/2004 8/2004 1/2005 8/2005

  8. Source: Producers Rice Mill (producersrice.com)

  9. 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

  10. 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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