WORLD WHEAT: This charge depicts world production and consumption
of wheat from 1985 to the present. The 1996 world wheat crop was the second largest
on record. In spite of this huge crop, world ending supplies of wheat will still
be the second smallest on record. This is the first year since 1992 that world
wheat production has exceeded consumption.
WORLD RICE: China and the balance
of Asia has become the largest market for world wheat. Wheat will compete with
rice in these markets as a food grain. World rice consumption has exceeded world
rice production in nearly every year since 1985. The 1996 world rice corp will
again be the largest on record, but consumption will exceed production. The point
is that rice isn't an easy substitute for wheat. Rice, too, is in short supply.
COARSE GRAINS: Like wheat, the world has a record large coarse grains crop
that resulted in world coarse grains ending supplies showing a sharp increase.
The long term trend has been that world consumption continues to grow at a steady
rate. Any world production problems will again shrink world supplies to very tight
levels.
WORLD SOYBEANS: World soybeans ending supplies will be the second
smallest on record assuming that South America has another record crop.
WORLD
OILSEEDS: World oilseeds consumption continues to grow and more than keep pace
with world production increases, primarily in the southern hemisphere. World ousted
supplies are very tight and world production must continue to increase annually
to keep pace with consumption trends.
CONCLUSION: Even though world commodity
prices have dropped dramatically from the record levels of the past year, the
overall world supply situation is very tight. The world will need consistently
excellent annual production to keep prices in check. We believe that the current
low level of prices is a temporary phenomenon and that world price levels, over
the long term, will be at higher levels.
