WASHINGTON (B)--U.S. wheat export prices, free on board for the Gulf of Mexico, will rise but not "sharply," in 2000, according to the World Bank's release Feb. 3 of its Global Commodities Markets Report.
The World Bank said, "Wheat prices are expected to increase this year after the sharpest three-year decline in at least four decades. However, high stocks will keep prices from rising sharply."
U.S. wheat export prices, fob for the Gulf of Mexico, will average $122 per tonne in 2000, up from $112 in 1999, according to the report. The wheat export price average is expected to again rise in 2001 to $130 per tonne.
The World Bank also stressed wheat prices will soon be reaping benefits from expanding international trade.
"World wheat trade is increasing in response to both low prices and improving economic conditions in developing and industrial countries," according to the report.
The World Bank also predicted that, based on USDA data, world wheat production would drop to 584,164,000 tonnes in 1999-00, versus 588,656,000 in 1998-99. At the same time, the report predicted world exports would increase in 1999-2000 to 103,635,000 tonnes, from 101,110,000 in 1998-99.
The World Bank also forecasted that average U.S. corn prices would rise to $100 per tonne in 2000, up from $90.2 per tonne in 1999.
Prices are for U.S. No. 2 corn, U.S. Gulf.
"We do not expect maize (corn) prices to rise sharply this year, but higher prices are expected as demand and supply continue to adjust to current low prices," the report said.
The report also predicted a continued recovery of U.S. corn prices, which are forecast at $110 per tonne in 2001 and $130 per tonne in 2010. However, the forecasted price for 2010 is still considerable below the 1996 price of $165.8 per tonne.
Although the nominal price for U.S. soybeans hit a 28-year low in 1999, soybean prices are expected to rise in 2000 as production contracts and high global ending stocks are drawn down, according to the World Bank report.
In its report, the World Bank said the U.S. price for soybeans is expected to reach an average $220 per tonne, up from an average $201.70 in 1999, the lowest nominal price since 1972. If calculated in inflation adjusted 1972 dollars, the bank said the 1999 soybean price was just 40% of the 1972 price.
Bank figures estimate that the U.S. soybean price is expected to reach $230 per tonne in 2003.
The bank said world trade in soybeans is expected to increase in 2000, although not enough to reduce high global stocks. Countries recovering from the worst of the Asian financial crisis of 1997-98, such as South Korea and Taiwan, are expected to increase soybean and soymeal imports in 2000. The bank also expects Mexico and Indonesia to increase soybean imports in the coming year.