Posts Tagged ‘Canada’
IGC on world grains in August: stocks down, maize down
The International Grains Council (IGC) in its end-August 2011 Grain Market Report has said that world grains production is expected to rise significantly from last year’s reduced outturn, but the forecast is lowered from July due to a sharp cut in the US maize crop estimate.
While a downward adjustment is also made to the 2011-12 consumption forecast, global end-of-season grain stocks are nevertheless placed lower than before, projected to decline by 4% from their estimated level at the start of the season. Total production is now forecast at 1,808m. tons, down by 9m. from the previous month but still significantly higher than in 2010-11 (1,748m.). While the wheat crop figure is raised by 3m. tons, to 677m. (651m.), the world maize production forecast is reduced by 10m. tons, to 849m. (824m.) because of the further decline in US yield prospects.
In view of the tightness in the US maize market, with prices likely to stay firm, also in relation to wheat, feed use of grain is placed 3m. tons lower than before, at 766m., but still up from the past year’s 749m. Global feed use of maize is trimmed by 4m. tons, but that of wheat is placed slightly higher than before, at a twenty-year peak of 125m. tons, reflecting ample availabilities of lower quality grades. With the reduction in the global production total only partly absorbed by a cut in the consumption forecast, the projection of world carryover stocks in 2011-12 is reduced by 5m. tons, to 342m. This would represent a drop of 16m. tons from the estimated carry-in level, mainly due to the expected decline in maize inventories.
[Tables: total grains supply and demand ; total grains trade ]
In particular, end-season stocks in the eight major exporters are projected to fall to 112m. tons, down from 128m. at the start of 2011-12 and from 170m. the year before. These would be the smallest since 2003-04. The global trade forecast for grains in 2011-12 is almost unchanged at 244m. tons, up 1m. from the year ended this June. Bigger than previously projected imports lift the wheat figure by 1.5m. tons, to 128.2m., but this is balanced by a reduction for maize trade, now placed at 92.7m. tons. The substantial recovery in Black Sea region supplies will result in a major shift back to this origin, especially for wheat, with the downturn in US maize exports also partly offset by expected record Ukraine shipments of this grain.
WHEAT: World wheat supply and demand are forecast to be broadly balanced in 2011-12, with a rise in production matched by higher use. With winter wheat harvests nearing completion in the northern hemisphere, better than expected results in the EU, CIS and China outweigh the somewhat reduced prospects in the US and Australia, and the forecast of world production is raised by 3m. tons, to 677m. (651m.).
[Table: Grains and oilseeds index ]
Much of the rise in supply compared with last month is absorbed by a further increase in projected feed wheat demand, contributing to a larger than normal year-on-year upturn in total world wheat consumption, to 678m. tons (657m.). The global carryover is expected to be broadly unchanged, placed 1m. tons higher than in the last Market Report, at 191m. However, stocks of the highest-protein milling wheats are expected to tighten, especially in the US and Canada, contributing to a 3.9m. ton fall in the combined carryover in the eight major exporters, to 64.6m. This is up by 2.0m. tons from last month’s figure, including larger projections for the EU, Kazakhstan and Ukraine.
MAIZE (CORN): The US crop forecast is cut sharply from last month, but production prospects in the southern hemisphere have improved and the 2011-12 maize crop is still projected to be the largest on record at 849m. tons (824m.). Demand is expected to increase, but at a slower pace. Growth in feed use will be limited mainly to developing countries, with meat output in most industrialised nations likely to increase relatively slowly due to high feed prices and flat demand.
Growing supplies of competitively-priced lower grade wheat will limit demand for maize, while use of distillers dried grains (DDG) will also remain high. After rising sharply in recent years, maize used for the manufacture of fuel ethanol is forecast to show very little growth, with the figure for the US projected to be unchanged from 2010-11. EU import needs are seen lower than before and, with some buyers in Asia likely to further boost feed wheat purchases, the 2011-12 world trade forecast is trimmed by 1.4m. tons, to 92.7m., almost unchanged from last year.
RICE: World rice production (milled basis) in 2011-12 is projected to increase by 2%, to a record 457m. tons. This assumes larger outturns in Far East Asia, including in India, where prospects for this year’s kharif crop are generally favourable. Increased supplies should also enable a further rise in that country’s consumption, with world use forecast to expand to an all-time peak of 457m. tons. With global production and consumption expected to be broadly in balance, the 2011-12 carryover is set to show little overall change, at a nine-year high of 99m. tons. Within the total, inventories in the five major exporters are expected to climb to 30.9m. tons (29.2m.). World trade in calendar 2012 is projected to expand by 1%, to a record 32.2m. tons, with larger shipments to several countries in Asia and sub-Saharan Africa.
[Tables: rice supply and demand ; rice trade ]
SOYABEANS: World soyabean production in 2011-12 is projected at 258.1m. tons, a decline of 3% from last year, mostly reflecting prospects for a smaller US outturn. Solid demand from Asia (China) will spur further growth in world trade in 2011-12, forecast to rise to a record 96.4m. tons (92.5m.). Global soyameal trade is placed at 60.3m. tons (58.3m.), the year-on-year expansion resulting from bigger purchases by the EU and Far East Asia.
[Table: soyabeans trade ]
Grains market report, 2011 April – IGC highlights volatile trading
The International Grains Council has released its grain market report for 2011 April. Here are the salient points and outlooks for wheat, rice and maize.
The past month was again volatile in global markets, with a sharp jump in grain values in early April largely centred on renewed bullish trading in maize (corn), partly in response to new US data indicating heavier than anticipated domestic use. However, there was also general nervousness about world weather conditions for upcoming northern hemisphere harvests, while developments in other commodities, energy markets and global economic news played a role too.
Day-to-day volatility in futures exchanges remained very high, with the average “historical volatility” percentage (HV20) for nearby US CME corn in Chicago showing a further increase since March. International wheat prices registered net gains of some $30 per ton, reflecting a generally tight market for milling wheat, especially premium varieties, with concerns about the impact of dry conditions on the next US Hard Red Winter crop and overly wet weather on spring wheat plantings.
There were also uncertainties about the future relaxation of export controls in the Black Sea region. US nearby maize futures climbed to all-time highs in early April, when the latest quarterly stocks data, indicating much higher than anticipated use, eclipsed the slightly bearish US planting forecast, reigniting worries about the likely low level of pipeline stocks. Heavy US export sales activity and continued speculation about purchases by China added further to the bullish market sentiment. [Get the IGC index data file here.]
In contrast, prices of oilseeds showed little net change in the past month, with new-crop soyabeans from South America beginning to enter the market, offsetting concerns about the tighter supply outlook in the US. Global rice prices actually moved lower in the face of improved supplies from recent Asian exporter crops. Despite strong global demand for commodities and raw materials, and rising bunker fuel prices, dry bulk ocean freight rates fell significantly due to a continuing build-up of surplus tonnage.
WHEAT: Less than ideal conditions for some crops lower the projection of world wheat production in 2011-12 by 1m. tons, to 672m., but this is still 22m. more than the year before. Winter wheat in the US has been affected by dry conditions and rains are also needed in the EU and China. Spring wheat sowing is being hindered by wet soils in the US, Canada and Russia. This year’s bigger global harvest is expected to be matched by higher consumption: the world total is placed slightly above last month’s, at 672m. tons. World stocks are projected to remain steady, at 186m. tons. World trade will be lifted by larger milling imports in North Africa and Near East Asia as well as by anticipated strong global demand for competitively-priced wheat for feed. Shipments in 2011-12 are forecast at 126m. tons (122m.).
MAIZE: High prices are forecast to boost world plantings by 3% in 2011-12. Assuming yield growth returns to trend, global production is projected to increase by almost 5%, to a record 847m. tons. Potentially tight supplies and firm market prices are expected to limit consumption growth to 1.3%. Although meat demand will remain firm in number of developing countries, overall growth in maize use will likely slow, as livestock producers switch to wheat. Due to a projected standstill in demand from US ethanol producers, global industrial use of maize is forecast to slow to only 1.3%. A larger crop in the EU and increased competition from feed grade wheat is projected to result in 1% drop in world trade, to 94m. tons.
RICE: World rice production in 2010-11 is placed at a record 450m. tons. Ample availabilities will underpin rice consumption, set to expand by 2%, to 448m. tons, while the 2010-11 carryover is expected to reach an eight-year peak of 96.5m. tons (94.0m.). After last year’s solid rise, world trade is forecast to decrease by 2%, to 30.3m. tons reflecting a likely steep fall in imports by the Philippines.
Grain market report, February 2011
The International Grains Council has released its monthly grain market report, covering the movements in and events of February 2011. Here are the main observations and forecasts.
Outlook for 2011-12: Although forecasts of production and consumption are tentative at this time, global wheat supply and demand is projected to be broadly in balance in 2011-12. Strong prices will boost plantings in a number of countries in 2011, the global area forecast to increase by 3%, to 224m. ha., the largest since 1998. Although there are concerns about crop prospects in some major producers, world production in 2011 is forecast to increase by 24m. tons, to 672m., second only to the 2008 record.
With 2010-11 southern hemisphere maize harvests only just underway and planting intentions for the next crop still uncertain, forecasts for 2011-12 are largely nominal. Given initial planted area assumptions and, assuming trend yields, larger maize harvests are forecast in several key producers, including the US and China. World production is expected to set a new record but, unless yields are exceptionally high, a second consecutive drop in world supplies is projected. Based on underlying strong demand, maize availabilities are projected to remain tight, with closing stocks set to fall for a third successive year.
Commentary: Grain and oilseed prices continued their upward march in early February, with some values nearing the peaks seen in 2008. However, in renewed day-to-day volatility, markets then fell back sharply, partly on concerns about the impact of political turmoil in parts of North Africa and Near East Asia. There was little fundamental change in this year’s overall global supply and demand situation, although there were still uncertainties about the final outcome of ongoing maize and soyabean harvests in the southern hemisphere, as well as prospects for 2011-12 crops.
In wheat markets, tightening milling grade availabilities and heavy international buying, including of feed wheat, spurred further substantial price gains early in the month, while worries about winter wheat crops in the US and China also featured. Several countries announced they would reduce or remove import duties. In the second half of February, nearly all earlier gains were reversed as the political unrest in some countries triggered a wave of selling in commodity futures. While maize (corn) prices also fell back somewhat, they still registered significant net gains. These reflected more fundamental future supply concerns, with evidence of continued heavy industrial and feed demand and speculation about the additional plantings required in the US to prevent a further decline in stocks.
In contrast, oilseed prices registered a sharp fall despite initial strength, with markets also noting the improved crop prospects in South America. Trends in international rice prices were mixed in the past month, export values in Thailand firming somewhat while those in Vietnam falling back as the main harvest gathered pace. Dry bulk ocean freight markets, especially in the non-grain sector, initially declined further due to excess capacity, but then displayed a firmer trend, with higher bunker fuel prices also a factor.
Grains supply and demand in 2010-11: The latest assessment of the global grain situation in 2010-11 shows little overall change from last month. Mainly due to revisions to the southern hemisphere crop estimates there is a 2m. ton increase in the world grain production estimate for 2010-11, to 1,728m. tons (1,793m.). However, this is accompanied by an increase of 3m. tons in the consumption forecast, mostly because of higher than anticipated use of maize for ethanol (in the US) and of wheat for feed. Total consumption of grains is now placed at 1,790m. tons, up from 1,761m. in 2009-10, therefore exceeding output by 62m. tons. This is reflected in a drop in stocks at the end of 2010-11 which, at 341m. tons, will be the smallest since 2007-08.
Wheat: World wheat production in 2010-11 is placed only marginally higher than before, at 648m. tons, with an increase in the estimate for Argentina balanced by a reduction for Australia. The forecast of consumption is almost unchanged, at 661m. tons (649m.), as a larger feed use estimate is offset by smaller figures for food and industrial use. Feeding of wheat is being boosted by competitive prices relative to maize and by ample lower-grade export availabilities in Australia and Canada. Strong export demand for these supplies contributes to an increased forecast of world trade, up by 0.9m. tons, to 123.6m. The forecast of world wheat stocks at the end of 2010-11 is unchanged from last month, at 185m. tons, down by 13m. from the start of the season.
Maize: World maize production in 2010 is forecast at 811m. tons, 2m. higher than last month but down 2m. from the previous year’s record. Yield prospects improved in Brazil but declined in Argentina and South Africa. The consumption forecast is raised by 3m. tons, to a record 845m., some 30m. higher than last year. Industrial use is up 2m. tons from before, reflecting increased demand from US ethanol and HFCS manufacturers. World closing stocks are forecast to fall by 22%, to a four-year low of 119m. tons. US carryovers are placed at just 17.1m. tons (43.4m.), lowering the stocks-to-use ratio to 5%. Global trade (July-June) is forecast to increase by 8% to 93m. tons.
Rice: At 450m. tons, the forecast of global rice production in 2010-11 is placed slightly lower than in January, but is still 10m. higher than in the previous year, following bigger crops in India and China. Increased use in those countries is expected to result in a 2% rise in consumption, to an all-time high of 447m. tons, while the larger global outturn will also enable an increase in ending stocks, to 96.9m. (93.9m.). At 30.5m. tons, global rice trade in calendar 2011 is forecast to expand by around 1%.
Food production and grain trade, Jan 2011
The International Grains Council (IGC) has released its Grain Market Report for 2011 January. The IGC said that world grains supplies are forecast to tighten in 2010-11 but the outlook is little changed from two months ago. World production is expected to decline by 3.8%, to 1,726m. tons: the wheat estimate is lifted on better than expected southern hemisphere crops but the maize total is cut.

A serious drought has developed in eastern China over the past few months. Total precipitation has been scarce since October 2010, with some locations on the North China Plain receiving less than 10 percent of normal precipitation through December 2011. A lack of snow cover has deprived the dormant winter wheat crop of valuable moisture and protection from frigid temperatures and winds. Seasonably dry and cold weather is expected to continue for the next two weeks. USDA's WASDE said the impact of the drought has been mitigated by the widespread availability of water for irrigation, but crop stress could become serious if the drought continues after the winter wheat emerges from dormancy in February/March 2011.
By far the biggest fall in grains output was in drought-affected Russia, with big reductions too in the EU, the US, Kazakhstan and Ukraine. A further rise in world grains consumption is forecast in 2010-11, to 1,787m. tons. However, at 1.4%, the rise is flatter than in recent years. The expansion in industrial use has slowed markedly, especially in the US ethanol sector, although recent use there has been higher than anticipated. Total feed use will only rise moderately this year.
The forecast fall of 62m. tons in global carryover stocks mirrors the reduction in the major grain exporters, with big declines in Canada, the EU, Russia and the US. World trade in grains is expected to rise by 2m. tons, to 242m., only marginally more than before, with bigger imports by the EU and Russia expected to outweigh reductions in Near East and Far East Asia. Because of the fall of 29m. tons in Black Sea shipments, exports by Argentina, Australia, the EU and the US are expected to climb steeply.
IGC said that international grain and oilseed prices advanced strongly in December and again in January, with some values at their highest for two years. However, export prices remained below the peaks recorded early in 2008. While there has been little fundamental change in the overall supply and demand balance in the past two months, markets were driven higher by concerns about supplies of quality milling wheat and the tightening outlook for maize and soyabeans.
The influence of other commodities, including crude oil, also featured regularly on the major exchanges. For wheat, reports that the extremely wet conditions in eastern Australia would render at least one-third of the country’s large wheat crop unfit for flour milling were especially bullish. More recently, better prospects for US exports and a winter wheat acreage report showing a smaller than expected rise in Hard Red Winter wheat plantings further triggered buying.
IGC said that China was among several recent customers for Australian feed grade wheat. For maize, there were worries about a reduced official US carryover forecast as well as about whether plantings for the next crop would be sufficient to prevent stocks falling further in 2011-12. The impact of dryness, attributed to the La Niña event, on Argentina’s upcoming harvest added to the market’s nervousness. Similarly, despite quite ample current stocks, US soyabean prices moved higher, initially because of continued heavy demand from China but more recently due to a lower official US supply estimate and strength in crude oil. Rice export prices also increased, but while Thai values in late-December climbed to a ten-month peak, they subsequently fell back as the main crop harvest advanced. After mostly declining since June, ocean freight rates for grains firmed slightly in recent months, despite a further slide in the Capesize sector.
The US Department of Agriculture’s World Agricultural Supply and Demand Estimates (WASDE) for 2011 January has said that global 2010-11 wheat supplies are raised slightly this month as increased beginning stocks are mostly offset by lower foreign production. Beginning stocks for Argentina are up 0.9 million tons with upward revisions to 2008-09 and 2009-10 production estimates. Argentina production is also raised 0.5 million tons for 2010-11 as harvest results indicate higher-than-expected yields. Production in Brazil is raised 0.4 million tons as favorably dry harvest weather boosted yields for the 2010-11 crop. EU-27 production is raised 0.3 million tons based on the latest official estimates for Poland. More than offsetting these increases are reductions for Kazakhstan and Australia. Kazakhstan production is lowered 1.3 million tons based on the latest government reports. Australia production is lowered 0.5 million tons as heavy late-December rains and flooding further increased crop losses in Queensland.
According to WASDE 2011 January, world wheat imports and exports for 2010-11 are both raised slightly. South Korea imports are raised 0.4 million tons, mostly offsetting an expected reduction in corn imports. Imports are also raised 0.2 million tons each for Thailand and Vietnam based on the pace of shipments to date and the increased availability of feed quality wheat in Australia. Imports are lowered 0.5 million tons for EU-27 based on the slow pace of import licenses to date. Major shifts among exporters are projected as importers focus on U.S. supplies to meet their milling needs. Australia exports are reduced 1.5 million tons as quality problems limit export opportunities. Kazakhstan exports are reduced 1.0 million tons with lower supplies. While Argentina marketing-year (December-November) exports are raised 0.5 million tons, exports during the remainder of the July-June world trade year are expected to be lower based on the slow pace of government export licensing.
Global 2010-11 wheat consumption is projected 1.2 million tons lower, mostly reflecting reduced wheat feeding in EU-27, the United States, and Kazakhstan. Food use is also lowered for EU-27 and Pakistan. Partly offsetting are increases in feed use in South Korea, Thailand, and Vietnam, and higher expected residual loss in Australia with the rain-damaged crop. Global ending stocks are raised 1.3 million tons with increases for EU-27, Argentina, and Australia, more than offsetting the U.S. reduction.
WASDE 2011 January said that global 2010-11 rice production, consumption, trade and ending stocks are lowered slightly from a month ago. The decrease in global rice production is due primarily to a smaller crop in Egypt, which is down 0.5 million tons (-14%) to 3.1 million. Egypt’s area harvested in 2010-11 is reduced 19 percent from a month ago and is down 30 percent from the previous year. A reduction in the Egyptian government’s support of producer prices has discouraged farmers from planting rice. Additionally, the Egyptian government has imposed water restrictions thus reducing irrigation water availability. Furthermore, government restrictions have reduced exports. Global imports are increased slightly due primarily to increases for Indonesia and Turkey, but partially offset by a reduction for Egypt. Global exports are increased slightly due mostly to an increase for Thailand, partially offset by a decrease for Egypt. World ending stocks are projected at 94.4 million tons, down 0.4 million from last month and last year.
Early price indicator for 2011 foodgrain
Agrimoney has reported that London wheat for January delivery hit £198.40 a tonne on Thursday, beating the previous record for a spot contract of £197.50 a tonne set in September 2007.
“The peak came despite an uncertain performance by Chicago wheat, the global benchmark, which dipped in and out of negative territory in thin pre-holiday trade, and after disappointing US weekly export sales data. However, in London, prices continued to be boosted by data showing a doubling in UK wheat shipments in 2010-11, at a time when domestic demand has been lifted too by fresh capacity at plants converting the grain into ethanol.”
The buying was reflected too in wheat prices in Paris, where the January contract touched a two-year high of E250.00 a tonne, a two-year high and a “big psychological level for many in the market”, according to a grains analyst Agrimoney spoke to.
The market was finding that, despite the rises in prices of more than 80% in Paris since June, and more than 90% in London, “demand for wheat, and in particular milling quality wheat, has simply not been rationed”. And fundamentals both inside and outside the European Union “seem to offer little hope for a half to further price increases.
On 20 December, Reuters had reported (this is via Futurespros) that Chicago wheat futures rose more than 1 percent on Monday, taking the monthly gains to around 18% as weather concerns in top exporters United States and Australia continued to underpin the market.
“Chicago Board of Trade March wheat rose 1.45% to $7.64 a bushel. CBOT front-month wheat has risen nearly 18% so far in December, the biggest monthly gains since July when the grain market jumped more than 40% as a severe drought ravaged crops across the Black Sea region. CBOT wheat is on track to post its first annual gain in three years after dropping 42% in the past two years, helped by a drought which decimated the Russian crop and halted exports and rains which reduced the quality of Australian wheat.”