Current estimates of grain use and projections for this year’s crop suggest that feedgrain prices will not rise significantly anytime soon. Iowa State University Economist Robert Wisner notes that the U.S. Department of Agriculture, in its Feb. 8 U.S. and World Supply-Demand report, lowered its projected 2000-01 U.S. corn exports to 2.05 billion bushels. That figure is 113 million or 6 percent above last year, but down 100 million bushels from last month.

Export inspections from Sept. 1, 2000, through Feb. 8 were down 12 percent or 106 million bushels from a year earlier. To reach the current projection, Dr. Wisner notes. U.S. corn exports for the remainder of the current marketing year will need to average 23 percent above the same period last season. “Based on export market conditions during the first five months of the marketing year, that looks highly optimistic,’ he says.

Reports from China indicate its corn exports are likely to continue until at least midyear despite an estimated sharp decline in its 2000 corn crop. And buyers in Japan and South Korea are continuing to restrain purchases because of concerns over the StarLink variety.

Dr. Wisner says it seems clear that StarLink-related problems have been a major factor in this season’s decline in U.S. corn exports to Japan and South Korea. To what extent StarLink R has
been a factor in reduced exports to the other destinations is less clear. Based on USDA’s World Agricultural Outlook Board estimates showing a 15 percent or 1.24 billion bushel decline in 2000 feed grain production of other exporting countries, including China, much stronger U.S. corn export demand had been expected. In addition, analysts estimate that Eastern Europe’s 2000 feed grain production declined 740 million bushels from the previous year.

For soybeans, USDA projects this spring’s South American harvest to exceed last year’s resulting in reduced U.S. export prospects for the balance of the current marketing year. However, Dr. Wisner notes, combined exports to date and outstanding unshipped exports were up 16 percent from a year earlier due to increased world demand for soybean meal resulting from the six-month ban on feeding meat meal in the European Union.