SOVIET GRAIN PRODUCTION AND TRADE PROSPECTS (S-09061)

Created: 7/11/1975

OCR scan of the original document, errors are possible

OASPECIALCOLLECTIONSAS

Soviet Grain Production and Trades5

The continuationevere..drought centered inValley is reducing our estimate of this year'sbut out current estimate is still well abovetons. In other spring grain areas, parts ofNew Lands area western Siberia, for examplegrain yields are likely because of high Also, we stillecord winter grainof good to excellent conditions in the .

The reduced crop prospects boost estimated Soviet import needs0 million tons of grain for delivery this fiscal year. This amount should cover the potential gap between Soviet grain output and requirements as well as provide the amounts' that would have been required evenecord yearto cover shortfalls in certain types of grains and to save transport costs on grain shipments to Cuba and other client states as well as to the Soviet Par East. Generally good crop conditions thorughout the world this year have made prices relatively favorable.

According to current rumors, the Soviets have already purchasedillion tons of Canadianillion toas of US grain. These reports apparently originated in London where the Soviets were rumored to have chartered shps

to haul grain from North American ports. Our nost reliable information indicates that the Soviets have chartered ships on the Great Lakes that couldilliorr tons of grain, probably Canadian. As yet* neither*'the Canadian Wheat Board nor USDA has confirmed any new grain purchases. Commodity market sources in Chicago claim that they have seen no market action that would support large purchaser.

f

.of OS grain.

USDA's last estimate of Soviet grain output

million tons but it may be reduced*illion tons or

below at today's Task Force meeting (scheduled

The difference between USDA's estimate and ours largely

is due to their more pessimistic assessment of winter grains,

USDA's last: estimate of Soviet grain imports during FY 76

illion tons of-wheatillion tons of feedgrain-

but this will also change when the output estimate is

lowered. (Confidential)

Soviet Grain Production and Trnde Prospects as5

No new information affecting Soviet crop prospects has been received.

According to the press ticker, London shipping sources have confirmed Soviet chartering of bulk carriers from North

*

American ports which could carryillion tons of grain. We have no independent confirmation of these shipping reports.

ships chartered by the Soviets to carry their largeurchases2 werehree-year period, thus expiring shortly.

still have no confirmation of Soviet purchases ofCanadian grain. The roost prevalent rumors are 3of Canadianillion tons of US grain and/or adeal forillion tons of US/Canadian grain.

o The Canadian Wheat Board has refused to confirm or deny the reports except to say that any annoucement would originate from Ottawa and Moscow simultaneously.

the Soviets are negotiating largely for the usual annual purchase of several hundred thousand tons of wheat and wheat flour for shipment to Cuba.

o USDdenies any knowledge of grain sales to the USSR by US firms but acknowledges that upillion tons of cornillion tons of wheat would be acceptable to the US Government.

Soviet Grain Production and Trades of5

Continuing drought in the southern Ukraine has damaged the corn crop, possibly boosting Soviet demand Cor fecdgrain imports.

The exact amount of Soviet charter fixtures is still not known. So for, all those confirmed have been for the Great Lakes, which could haul either Canadian or US grain.

ticker today has focused on:

the Carl Butz statement yesterday that reports

of an impending grain deal with the Soviets "may be more thannd

O senator Henry Jackson's speech prepared for delivery in the Senate today that US grain exporters have admitted to his committee staff negotiations with the Soviets for "several million tons ofackson added that no major sales have been made to date, confirmed by USDA.

confirms negotiations underway and

believes that the sales will amount to atillion

wheatillion tons of corn would be acceptable

to the US Government but thnt if the corn crop is estimated

toillion bushels (uSDA's current forecast is

illion) this limit could be raised.

5

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Soviet Grain Production and Trade Prospects as ot JT'July 75

The Soviet drought worsened and spread in lato June and early July, reducing our estimate of this year's grain cropillion tons.

claims that one grain company has concluded their negotiations in Moscow 'and has sold

illion tons of cornillion tons of barley. Two other grain companies will begin talks in Moscow on Monday.

Butz still says that'.sales of "up toillionrain* would be acceptable to the USG and that this would haveminimal impact on bread prices.*

JSSBSffiff

S

MEMORANDUM

Soviet Grain Production and Trade as of uly

The Soviet drought worsened and spread in late June and early July, reducing our estimate of this year's grain cropillion tons.

that one grain company has concluded their negotiations in Moscow and has sold

illion tons of cornillion tons of barley. Two other grain companies will begin talks in Moscow on Monday. USDA will not divulge the names of the companiesa line that no contracts have been reported to them as yet. Butz still says that'sales of "up toillion tons;of grain" would be acceptable to the USG and that this would havominimal impact on bread prices."

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