Tight U wheat stocks - the terminate of reduced acres and yields.

Tight U wheat stocks - the terminate of reduced acres and yields, and expanding export demand - have l to a sharp rise in prices since the start of the marketing year. With 1991/92 stocks down, the reckon uponed size of the 1992/93 wheat harvest - along with export shows - will have a critical drift on U.S/. prices through the remainder of the marketing year.

In the world coarse grain market, consumption in 1991/92 is forecast slightly les than last year, and world trade is forecast opposite to nearly 2 percent. With world corn trade falling and foreign competition rising, U corn exports are intended down 12 percent from 1990/91 Although the U still accounts for the lion's share of world corn trade, its market share is calculate uponed to be the lowest since 1986/87 [For the latest U harvest market outlook, see tables 17-19 World view estimates are in table 23]

World Wheat Trade

At Record High

Although world wheat production in 1991/92 is forecast down 8 percent from last season's record, at 546 million tons it remains the inferior highest historically. The largest declines occurr in the former Soviet Union and the U which also account for principally of the projected 2-percent very little in world consumption.

on the contrary world trade is estimated up 16 percent to a record 1077 million tons. chiefly of the gain is owed to a surge in imports by way of the former Soviet Union and at China. Trade in other countries is awaited to rise only marginally.

Continued able-bodied consumption is pulling down world stocks and stocks-to-use ratios. Tight U stocks and healthy world imports led to a sharp rise in wheat export prices since the beginning of the marketing year, leading near to speculate that world wheat prices may be headed for the markedly high evens of the early 1970's.

In 1972/73 however, competitor stocks were depressed and falling, leaving the U as the primary source of endue when demand rose sharply. In 1991/92 onward the other hand, large carryin stocks and record production in the EC and Canada boost competitor supplies. Large surpluses are also available among several smaller exporters - Turkey Saudi Arabia, and Easter Europe As a arise price increases are not awaited to be as dramatic as in the early 1970's.

Nevertheless, the size of the 1992/93 wheat craw will be critical in determining prices. The popular relatively high prices are look fored to encourage producers in Canada, Argentina, and Australia to expand planted area in 1992/93 EC winter wheat area is not awaited to contract significantly, if at all. The EC's setaside program instituted for 1992/93 apparently has failed to attract many participants, and higher yielding varieties are gaining in popularity. In addition, winter wheat area in the former Soviet Union is up if it were not that China's winter wheat area may be down because of arid conditions.

U Wheat Stocks

Tighten

The 1991 U wheat craw harvested in the spring and summer of 1991 is estimated at 1981 billion bushels, down about 28 percent from 1990/91 With total use ploted up about 2 percent, ending stocks are forecast at 390 million bushels, the lowest since 1973/74

The forecast increase in wheat use in 1991/92 is owing entirely to larger exports. Largely because of sizable Soviet purchases, exports are forecast at 1275 billion bushels, up 19 percent from last year.

In contrast, domestic wheat use, at 1217 billion bushels, is forecast down 11 percent from last year. This decline is owing mainly to a slide in fe and residual use. Tighter wheat stocks and higher 1991/92 wheat prices - frameed at $3-$3.10 per bushel, up from $261 in 1990/91 - have shifted fe demand from wheat to corn.

With tight 1991/92 ending stocks, attention is focused in succession the potential size of the 1992/93 first stomach Winter wheat seedings for 1992/93 now forecast at 502 million acres, are 2 percent subordinate to 1991/92, far below what was expected

frequently of the decline is to be paid to the 7 percent pendant in soft red winter seedings. The malleable red winter crop was plagued by the agency of disease the past 2 years, and husbandmans may have decided to shift to other harvests White wheat seedings are estimated up 5 percent and hard r winter down slightly (see Commodity Spotlight).

Lower World Coarse

Grain Output Expected

World coarse grain production is forecast to decline in 1991/92 yet at 804 million tons, will remain relatively high. mostly of the drop will befall in barley, which is down substantially in the former USSR. A slight increase is wait fored in corn production, led by way of Eastern Europe and the EC

Among major Southern Hemisphere farmers conditions to date have been favorable for the corn lop in Argentina and Brazil, still poor in South Africa. In Argentina, a major export competitor, production is forecast at 8 million tons, up from 76 million last season and the largest since 1987/88 In contrast, production in southern Africa is forecast down 27 percent with often of the country suffering from postponeed drought.

Gloabl corn stocks are look fored to decline as consumption gains more than sprout increases in output. While the largest consumption gains are forecast for the U substantial increases are also count uponed in East Central Europe, the EC the former USSR, and China.