INTERNATIONAL G R A I N S C O U N C I L

GMR No. 407 20 January 2011

WORLD ESTIMATES MARKET COMMENTARY
million tons International grain and oilseed prices advanced
06/07 07/08 08/09 09/10 10/11 strongly in December and again in January, with
est forecast
some values at their highest for two years. However,
25.11 20.01
export prices remained below the peaks recorded
WHEAT early in 2008. While there has been little
Production 598 609 686 678 644 647 fundamental change in the overall supply and
Trade 111 110 136 127 122 123 demand balance in the past two months, markets
Consumption 610 612 638 650 660 661 were driven higher by concerns about supplies of
Carryover stocks 125 122 170 198 180 185 quality milling wheat and the tightening outlook for
year/year change -12 -3 +48 +28 -13
maize and soyabeans. The influence of other
commodities, including crude oil, also featured
Major exporters** 47 40 65 72 52 55
regularly on the major exchanges. For wheat,
MAIZE (CORN) reports that the extremely wet conditions in eastern
Production 710 795 799 813 810 809 Australia would render at least one-third of the
Trade 87 101 84 86 94 94 country’s large wheat crop unfit for flour milling were
Consumption 725 775 781 815 840 842 especially bullish. More recently, better prospects for
US exports and a winter wheat acreage report
Carryover stocks 117 137 155 153 121 120
showing a smaller than expected rise in Hard Red
year/year change -16 +20 +18 -2 -33
Winter wheat plantings further triggered buying.
TOTAL GRAINS* China was among several recent customers for
Production 1588 1697 1802 1793 1725 1726 Australian feed grade wheat. For maize, there were
Trade 222 239 249 240 241 242 worries about a reduced official US carryover
Consumption 1629 1684 1724 1762 1786 1787 forecast as well as about whether plantings for the
next crop would be sufficient to prevent stocks falling
Carryover stocks 282 295 373 404 340 342
further in 2011/12. The impact of dryness, attributed
year/year change -40 +13 +78 +31 -62
to the La Niña event, on Argentina’s upcoming
Major exporters** 116 112 152 162 105 104 harvest added to the market’s nervousness.
* Wheat and coarse grains Similarly, despite quite ample current stocks, US
** Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine,
United States
soyabean prices moved higher, initially because of
continued heavy demand from China but more
million tons (milled basis)
06/07 07/08 08/09 09/10 10/11 recently due to a lower official US supply estimate
est forecast and strength in crude oil. Rice export prices also
25.11 20.01 increased, but while Thai values in late-December
RICE climbed to a ten-month peak, they subsequently fell
Production 420 433 448 440 449 452
back as the main crop harvest advanced. After
mostly declining since June, ocean freight rates for
Trade 32 29 29 30 31 31
grains firmed slightly in recent months, despite a
Consumption 420 430 437 437 446 448 further slide in the Capesize sector. See graphic:
Carryover stocks 77 80 92 94 96 98 Wheat and maize export prices, January 2006-
year/year change +1 +3 +12 +2 +4 January 2011 www.igc.int/gmr/407/prices06_11.pdf

EXPORT PRICES
US$ / ton WHEAT MAIZE US$ / ton
RICE SOYABEANS
380 380 560 560
EU (France) US Corn, fob Thai 100% US Soyabeans, fob
360 US HRW 360 540
US SRW 540
340 340
520
320 320 520
500
300 300
500 480
280 280
460
260 260 480
240 440
240
460
220 220 420

200 200 440 400

23-Sep

19-Jan
13-Oct

02-Nov

22-Nov

10-Dec

30-Dec
23-Sep

19-Jan
13-Oct

02-Nov

22-Nov

10-Dec

30-Dec
23-Sep

19-Jan
13-Oct

02-Nov

22-Nov

10-Dec

30-Dec

13-Oct
23-Sep

02-Nov

22-Nov

10-Dec

30-Dec

19-Jan
 GRAINS* SUPPLY AND DEMAND IN 2010/11
World grains supplies are forecast to tighten in
2010/11 but the outlook is little changed from two
months ago. World production is expected to
decline by 3.8%, to 1,726m. tons: the wheat
estimate is lifted on better than expected southern
hemisphere crops but the maize total is cut. By far
the biggest fall in grains output was in drought-
affected Russia, with big reductions too in the EU,
the US, Kazakhstan and Ukraine. A further rise in
world grains consumption is forecast in 2010/11,
to 1,787m. tons. However, at 1.4%, the rise is
flatter than in recent years. The expansion in
industrial use has slowed markedly, especially in
the US ethanol sector, although recent use there
has been higher than anticipated. Total feed use
will only rise moderately this year. The forecast fall
of 62m. tons in global carryover stocks mirrors the
reduction in the major grain exporters**, with big
declines in Canada, the EU, Russia and the US.
World trade in grains is expected to rise by 2m.
tons, to 242m., only marginally more than before,
with bigger imports by the EU and Russia expected
to outweigh reductions in Near East and Far East
Asia. Because of the fall of 29m. tons in Black Sea
shipments, exports by Argentina, Australia, the EU
and the US are expected to climb steeply.
WHEAT: World wheat production in 2010 is
estimated at 647m. tons, the third-largest on record
and up by 3m. from November. Australia’s crop is
placed 2.0m. tons higher, at 25.0m., but significant
quality downgrading is reported. Better than
expected yields lift the forecast for Argentina by
1.0m. tons, to 14.0m. The forecast of global
consumption is slightly higher, at 661m. tons, up
11m. on last year. Favourable prices for weather-
damaged wheat relative to maize lift the projections
of feed use in some countries. The world stocks
forecast is raised by 5m. tons, to 185m., a drop of
13m. compared with the year before. Carryover
projections are increased for Australia, Canada and
China, but reduced for the EU and US. Increases
for Egypt, South Korea, China and Saudi Arabia lift
the world trade forecast by 1.1m. tons, to 122.7m.
(127.4m.). Because of tightening supplies in other
MAIN MARKET EVENTS SINCE 25 NOVEMBER 2010
6 Dec Philippines: bought 255,000 t feed wheat
from Australia
1 Dec- Egypt: GASC: bought 1,045,000 t wheats, incl
8 Jan 445,000 t US, 300,000 t EU (France), 180,000
t Argentina and 120,000 t Australia
3 Dec - Bangladesh: bought 300,000 t optional-origin
17 Jan wheat
7 Australia: ABARES: 2010 wheat crop f’cast
lifted 1.7m t, to 26.8m (+22%) but rains have
delayed harvest and reduced quality
8 Ukraine: Govt. approved extension of grain
export quotas until 31 Mar 2011
10/23 Iraq: bought 500,000 t wheat, incl. 350,000 t
US and 150,000 t Australia
16/28 Jordan: bought 150,000 t feed barley, likely
from Australia
16 Dec - Algeria: bought 1.3m t milling wheat and at
17 Jan least 0.2m t durum
© 2011
exporters, the forecast of US exports is raised by
2.0m. tons, to 36.0m.
MAIZE: The production forecast is cut by 1m.
tons, to 809m., down 4m. from last year’s record.
The US crop estimate is cut by 3m. tons, while
Argentina’s forecast is also 3m. lower, reflecting
overly dry conditions. These reductions are mostly
offset by increases elsewhere, including for China.
Consumption is forecast 2m. tons higher, at 842m.
(815m.). Feed use is expected to rise by 3% but,
because of high prices and competition from wheat,
the forecast is reduced by 2m. tons. Due mainly to
a rise in US ethanol output, forecast global
industrial use is lifted by 3m. tons, to 231m.
(218m.). World end-year stocks are projected to
fall to 120m. tons (153m.), including 19m. (43m.) in
the US. Forecast trade is unchanged, at 94m. tons
(86m.). EU demand has strengthened, but import
forecasts for Mexico and Canada are cut.
RICE: Reflecting a raised official figure for China,
the forecast of world rice production in 2010/11 is
lifted to a record 452m. tons, the 12m. increase
from last year due to larger crops in Asia. While
global consumption is increased from before,
ending stocks are raised to an eight-year peak of
98.2m. (94.2m). At 30.6m. tons, the forecast of
world trade in calendar 2011 is reduced slightly,
mostly reflecting a smaller projection of shipments
to the Philippines. However, the total will still be
2% higher than in the previous year.
PROSPECTS FOR PRODUCTION IN 2011/12
After last year’s sharp drop, the global wheat area
is projected to rise by about 3%, boosted by higher
prices and a return to more normal abandonment
rates, especially in Russia. Assuming average
yields, production is forecast to rise to 670m. tons
(647m.). The outlook for northern hemisphere
grains crops generally appears favourable at this
early stage, although much will depend on the
extent to which growers expand plantings of spring
crops, especially maize and barley.
* Wheat and coarse grains
** Argentina, Australia, Canada, EU, Kazakhstan, Russia,
Ukraine, US
22 Vietnam: bought feed wheat from Australia
4 Jan Argentina: Ag. Dep.Sec.: due to dryness,
2010 maize crop unlikely to match earlier
forecasts
11 Turkey: TMO bought 300,000 t wheats, incl.
240,000 t US
12 USA: USDA: 2011 winter wheat plantings est.
at 16.6m ha (+10%), incl. HRW at 12.0m
(+4%) and SRW at 3.1m (+47%)
USA: USDA 10/11 f’casts: maize crop cut
2.3m t, carryover down 2.2m. Soyabean crop
1.3m lower, stocks down 0.7m. Wheat exports
up 1.4m, stocks down 1.1m.
14 Argentina: BAGE.: 2010 wheat crop estimate
at 15.0m t
19 China: Traders: COFCO bought at least
150,000 t feed wheat from Australia
 GMR 407 – 20 January 2011
CONTENTS AND WEBSITE MENU
(N.B: Text and tables highlighted in blue are available in electronic version only )

GMR COMMENTARY
Page no. Page no.

SUPPLY AND DEMAND IN 2010/11 4 RECENT MARKET DEVELOPMENTS 13

General 4 Wheat 13
Wheat 4 Durum 14
Durum 5 Coarse grains 14
Coarse grains 6 Maize (corn) 14
Maize (corn) 6 Barley 15
Barley 7 Other coarse grains (sorghum, oats, rye) 15
Sorghum 8 Oilseeds 16
Oats 8 Rice 16
Rye 8 Ocean freight rates 17

OUTLOOK FOR PRODUCTION IN 2011/12 9 NATIONAL POLICY AND OTHER DEVELOPMENTS 17

Latest national trade-related measures 17
RICE: SUPPLY AND DEMAND IN 2010/11 10 Other national policy developments 18
Other developments 19
OILSEEDS: WORLD TRADE 12
Soyabeans 12 MARKET FOCUS
Soyameal 12 Five-year global supply & demand projections 19
Rapeseed/canola 12 to 2015/16
Recent trends in meat trade and impact on grains 20
World trade in barley malt

TABLES
Table no. Table no.
GRAINS

PRODUCTION SUPPLY AND DEMAND

Total grains (wheat and coarse grains) 1 Total grains 18A

All wheat 2 All wheat 18B
Wheat: area,yield, production (summary table) Maize (corn) 18C
Maize (corn) 3 Barley & sorghum 18D
Barley 4 Oats & Rye 18E
Sorghum 5
Oats 6 Durum wheat: Supply and demand/production/trade 19
Rye 7
Totals by grain 8
RICE
TRADE
Production 20
Total grains (wheat and coarse grains) 9 Trade 21
All wheat 10 Rice: main exporters' progress reports 21A
Maize (corn) 11 Supply and demand 22
Barley 12 Cumulative shipments by destination - All rice E
Sorghum 13
Oats 14 OILSEEDS
Rye 15
Soyabeans: production 23
Shipments and sales Rapeseed/canola: production 24
Soyabeans: trade 25
Recent reported sales (wheat and coarse grains) 16 Soyabeans: main exporters' progress reports 25A
Wheat: main exporters' progress reports 17A Soyameal: trade 26
Maize (corn): main exporters' progress reports 17B Soyameal: main exporters' progress reports 26A
Barley: main exporters' progress reports 17C Rapeseed/canola: trade 27
Rapeseed/canola: main exporters' progress reports 27A
Monthly and quarterly grain shipments A Cumulative shipments by destination
Cumulative shipments by destination Soyabeans F1
Wheat B1 Soyameal F2
Durum wheat B2 Rapeseed/canola F3
Maize (corn) B3
Barley B4
Malt B5 PRICES
Sorghum B6
Oats B7 Weekly export quotations 28
Futures prices 29
EU: licences, import duties and export refunds Historical volatility 29A
Export/import licences C1 IGC wheat price index G
Import duties C2
TRQ import licences C3 OCEAN FREIGHT RATES

CHINA Selected grain routes 30

Production D1
Trade forecasts D2
Trade progress report D3
Official trade data D4