Field crops overview - world wheat ending stocks off nearly 11% with sharp increase in prices in 1991/92; larger U.S. wheat crop forecast for 1992, partly due to mild winter climate; southern African countries see sharp production drop in corn due to continuing drought, but foreign corn production overall is up 5%; jump in feed and residual use of corn in U.S. due partly to larger livestock inventories; U.S. rice prices projected to increase well above 1990/91; reduced competition from China and short supplies in Brazil boost U.S. soybean exports; world cotton stocks go up as prices decrease - U.S. Dept. of Agriculture, Economic Research Service Report

Agricultural Outlook, April, 1992

With world carryover of wheat forecast off nearly 11 percent from last year and with near-record imports, wheat prices have risen sharply in 1991/92. These price gains likely will encourage larger U.S. spring wheat and Southern Hemisphere plantings for 1992/93.

By contrast with a buoyant wheat market, U.S. corn exports and market share are projected off in the face of sharp competition from other corn exporters. U.S. soybean exports were up sharply early in the 1991/92 season because of short Brazilian supplies from last year and reduced competition from China. But greater South American competition is expected after April harvests in Brazil and Argentina. #For the latest U.S. crop conditions and outlook, see tables 17-19. World outlook estimates are in table 23.] World Wheat Stocks Off More Than 10 Percent

With world wwheat ending stocks forecast off nearly 11 percent and near-record import demand, wheat prices have risen sharply in 1991/92. Global ending stocks will drop as U.S. stocks shrink to the lowest level since 1973/74, following expanded total use that sharply exceeds the smaller crop.

World production is estimated at 547 million tons, 8 percent below 1990/91. While forecast world consumption is down 2 percent, it is still well above production. Thus, world ending stocks are projected at nearly 126 million tons, 15 million below beginning stocks and the lowest in 2 years.

Imports are forecast to rise 14 percent in 1991/92 to a near-record 106 million tons largely because of strong purchases by two major importers--the former Soviet Union and China. China in increasing imports to satisfy urban demand. Imports by the former USSR, however, continue to depend on the availability of financial assistance. Despite credit guarantee offers from major exporters, particularly the EC, problems relating to financing, freight arrangements, and contractual agreements have slowed the delivery process.

In addition, recent sales to Brazil and Morocco have been stronger than anticipated. Brazil's crop was very low for the second year in a row, and imports are forecast up 38 percent. Severe drought in Morocco during the winter wheat season led to concerns about 1992/93 production, and the pace of imports has stepped up in the last half of 1991/92.

Barring crop failures in key exporting or importing countries, world prices and stock levels are not expected to reach a crisis situation. Winter wheat production in several major producing countries is likely to be up. And if prices remain high, planting in Australia and Argentina is expected to increase, as is spring wheat planting in the Northern Hemisphere.

Larger 1992 U.S. Wheat Crop likely

Prospects for 1992 are for a larger U.S. wheat crop, despite smaller winter wheat seedings. Although several areas have reported less than ideal winter wheat conditions, no compelling evidence indicates that yield prospects are outside the range of average-to-trend levels.

Weather has been mild in the Southern Plains over much of the winter, with temperatures in the major growing areas averaging 2-5 degrees above normal in December, 2-14 degrees above normal in January, and 6-10 degrees above normal in February. The mild weather was particularly favorable to winter wheat development after poor emergence last fall. Although half of the Kansas wheat crop was rated in poor to very poor condition at the end of November, wheat crop conditions by February were reported mostly good.

At spring planting time, producers of spring wheat are seeing much stronger prices than last fall. These higher prices, together with 1992's smaller ARP, will likely boost spring wheat acreage sharply over last year. A review of futures prices shows market returns not only favor planting wheat on wheat flex acres, but also on flex acres of other crop bases, such as barley and oats.

Looking back at the current crop year, the 1991 U.S. wheat crop totaled 1.98 billion bushels, down about 28 percent from 1990/91. With total use projected up about 2 percent, ending stocks on May 31, 1992 are forecast at 390 million bushels, the lowest since 1973/74.

Total U.S. wheat use in 1991/92, ast 2.49 billion bushels, is forecast higher than a year earlier due entirely to a forecast 19-percent increase in exports. In contrast, domestic wheat use, at slightly less than 1.22 billion bushels, is forecast down 11 percent from last year, due mainly to a drop in feed and residual use. The fall in feed and residual use is due to higher wheat prices this season, which are projected at $3-$3.10 per bushel, up from $2.61 in 1990/91.

Foreign Corn Export Competition Strong

Foreign corn production is forecast up 5 percent to a record in 1991/92, despite sharp production declines in South Africa and other southern African countries due to worsening drought. Production in South Africa is forecast off 45 percent, to just 4.5 million tons, and output in Zimbabwe and other African countries is also expected to fall sharply. Far from adding to export competition as usual, South Africa will need to import corn this season.