Resources Research

Culture and systems of knowledge, cultivation and food, population and consumption

Posts Tagged ‘corn

Grain market report, February 2011

leave a comment »

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%.

GM emergency signalled over Monsanto’s Roundup Ready crops

leave a comment »

The Farm and Ranch Freedom Alliance has reported that one of the USA’s s senior soil scientists has alerted the national government to a newly discovered organism that may have the potential to cause infertility and spontaneous abortion in farm animals, raising significant concerns about human health.

Dr Don Huber, professor emeritus at Purdue University, believes the appearance and prevalence of the unnamed organism may be related to the weed killer known as Roundup (made by Monsanto) and/or to something about the genetically engineered Roundup-Ready crops. In a letter to US Secretary of Agriculture Tom Vilsack, the professor called on the US national  government to immediately stop deregulation of Roundup Ready crops. His letter begins:

Dear Secretary Vilsack: A team of senior plant and animal scientists have recently brought to my attention the discovery of an electron microscopic pathogen that appears to significantly impact the health of plants, animals, and probably human beings. Based on a review of the data, it is widespread, very serious, and is in much higher concentrations in Roundup Ready (RR) soybeans and corn—suggesting a link with the RR gene or more likely the presence of Roundup. This organism appears NEW to science!

This is highly sensitive information that could result in a collapse of US soy and corn export markets and significant disruption of domestic food and feed supplies. On the other hand, this new organism may already be responsible for significant harm My colleagues and I are therefore moving our investigation forward with speed and discretion, and seek assistance from the USDA and other entities to identify the pathogen’s source, prevalence, implications, and remedies.

We are informing the USDA of our findings at this early stage, specifically due to your pending decision regarding approval of RR alfalfa. Naturally, if either the RR gene or Roundup itself is a promoter or co-factor of this pathogen, then such approval could be a calamity. Based on the current evidence, the only reasonable action at this time would be to delay deregulation at least until sufficient data has exonerated the RR system, if it does.

For the past 40 years, I have been a scientist in the professional and military agencies that evaluate and prepare for natural and manmade biological threats, including germ warfare and disease outbreaks. Based on this experience, I believe the threat we are facing from this pathogen is unique and of a high risk status. In layman’s terms, it should be treated as an emergency.

Written by makanaka

February 21, 2011 at 18:44

Food production and grain trade, Jan 2011

with 2 comments

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.

USDA Crop Explorer, south India rice coverage, 2011 forecast

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.

FAO food price index tops the 2008 peak

with one comment

The UN Food and Agriculture Organization’s food price index has risen to 214.7 for December 2010, which is above its peak of 213.5 in June 2008.

This new peak, at a time when the price of crude oil is above USD 90 a barrel, is the strongest signal yet that global foodgrain supply has entered a critical phase. The FAO index has been rising steadily through the second half of 2010 – we discussed it here.

The cereal price index stands at 237.6 which is almost 40 points below the peak of 274.3 (in April 2008). The oils price index stands at 263 which is just under 20 points less than the peak of 282.6 (in June 2008). The dairy price index stands at 208.4 which is 60 points under the peak of 268.6 (in November 2007).

But the sugar and meat price indices are at all-time highs. The meat price index is now at 142.2 (in September 2008 it was 137.4 and its previous all-time high was 139.3 in September 1990). The sugar price index is now at 398.4 which is an extraordinary 180 points above its all-time high of 218 (in March 1990 – it was 207 at the maximum during 2008). The sugar price index crossed 300 in August 2008 and remained above 300 until March 2010, and again crossed 300 in September 2010.

Comparing three-month averages for the FAO food index and its main index components helps us understand how the 2010-11 food price crisis compares with its predecessor in 2007-08:

Food     Meat       Dairy     Cereals    Oils       Sugar
3-month avg
at 2008 Jun    210.4    129.5    240.8    271.7    273.9    173.9
3-month avg
at 2010 Dec    206.4    141.2    206.3    227.0    242.1    373.7

A Bloomberg report quotes FAO senior economist Abdolreza Abbassian: “One might expect prices to come down in spring, and this may be in fact the worst. But given how unexpected the weather events have been, I for one would not want to bet on anything along those lines.” The report said that concern about drought doing harm to Argentine harvests helped corn jump 52% in Chicago last year and soybeans to rise 34%. Prices also gained as China, the world’s largest soybean buyer, became a net corn importer. Wheat added 47% in 2010 as Russia, hit by its worst drought in a half-century, banned all cereal exports.

“Eyes will be on the Argentina corn crop,” Abbassian said. “There is still, unfortunately, a potential for grain prices to strengthen on the back of a lot of uncertainty. If anything goes wrong with the South American crop, there is plenty of room for them to increase further.” Potential damage to South American soybean and corn crops is of greater concern for world grain prices than harm to wheat in Australia caused by floods, according to the economist. Argentina and Brazil are the world’s second- and third-biggest corn and soybean exporters after the US. “The watch is definitely on South America for the next two weeks,” Abbassian said. “Given the very tight corn market, and demand from China for soybeans and the tight soybean market, if those commodities start to rise more, that will also lift wheat.”

Agrimoney has a report polling commodities fund managers in several financial centres worldwide for their views. What they say about the impact major forecasts, such as the World Agricultural Supply and Demand Estimates, have is worth paying close attention to. The WASDE report provides the US Department of Agriculture’s comprehensive forecasts of supply and demand for major US and global crops.

Reuters has reported that India’s food inflation rose for the fifth straight week to the highest in more than a year, reinforcing fears it has spilt over to broader prices and cementing expectations of a January interest rate hike. “But the spurt in prices of many basic foodstuffs has also raised questions over the government’s ability to control price rises through monetary policy, with poor infrastructure, hoarding and supply bottlenecks contributing to stubbornly-high food inflation.”

Unseasonal rains are officially blamed for pushing up prices of vegetables such as onions and tomatoes, but some commentators point instead to poor agricultural productivity and transport after years of few reforms and weak government investment. Onion prices, a key food staple for Indian families, rose over 23% percent over the week to December 25. The food price index rose 18.3% in the year to December 25 and the fuel price index climbed 11.6%. This compared with 14.4% and 11.6% annual rises the previous week.

The Wall Street Journal has said that food prices in India are continuing their sharp rise, increasing concerns among economists about a prolonged spell of high prices and adding pressure to the central bank to raise interest rates later this month. “The Reserve Bank of India next meets on Jan. 25 to consider an interest rate rise after pushing up rates six times in 2010 – one of the most aggressive tightenings of any central bank. But calls for a further move keep coming, most recently with the International Monetary Fund saying in a report released Thursday that rates need to be higher to curb inflation.

“The central bank will need to walk a fine line, however, since liquidity within the bank system is tight and further rate hikes could exacerbate that problem, economists said. Data from the Ministry of Commerce and Industry Thursday showed that the wholesale price index for food articles rose 2.5% in the week ended December 25 from the previous week. The year-on-year inflation rate for food surged to 18.32% from 14.44% the week before. It was the fifth straight week of rising food prices, which have been hovering at elevated levels in recent months.”

Assessing Pakistan’s rice and cotton crop damage

leave a comment »

As winter sets in, IDPs huddle around a small fire at a camp in northwest Pakistan. Photo: Abdul Majeed Goraya/IRIN

As winter sets in, IDPs huddle around a small fire at a camp in northwest Pakistan. Photo: Abdul Majeed Goraya/IRIN

From late July through August, Pakistan received excessive monsoon rainfall across the country including many of the major rice and cotton growing areas. The extraordinary rainfall triggered severe overland and river flooding. The impact of the floodwater is most severe in Khyber Pakhtunkhwa (NWFP), Baluchistan, Punjab, and the northern districts of Sindh. These provinces have suffered significant loss of cropland and damage to agricultural infrastructure. The major kharif season (June-November) crops are rice and cotton, but a substantial amount of corn, millet, and sorghum is grown during the kharif season as well.

The floodwaters are receding in the mid- and upper-reaches of the Indus Valley but continue to expand in the southern district of Sindh. The final extent of the floodwaters and the resulting damage to crops is still uncertain. The USDA has made a preliminary assessment, based primarily on satellite imagery, which indicates significant crop damage in major rice and cotton areas along the Indus River in Punjab and Sindh provinces.

Pakistan health cluster partners and health facilities in flood-affected districts. Map detail from ReliefWeb

Pakistan health cluster partners and health facilities in flood-affected districts. Map detail from ReliefWeb

The USDA forecasts 2010-11 Pakistan rice production at 5.3 million tons, down 19 percent from last month, and down 1.5 million or 22 percent from last year. Area is estimated at 2.4 million hectares, 14 percent down from last month, and down 0.4 million or 14 percent from last year. Yield is forecast at 3.31 tons per hectare, down 5 percent from last month and down 9 percent from last year. USDA damage estimates, based primarily on satellite imagery, indicate rice cropland losses of 400,000 hectares. The rice crop is at various development stages ranging from the early vegetative to the reproductive stage. Satellite-derived vegetative indices indicate that upland cropping areas will benefit from abundant soil moisture, where flooding did not occur.

Cotton production is forecast at 9.3 million 480-pound bales, down approximately 2 percent from last month, and down 0.3 million or 3 percent from last year. Area is estimated at 3.0 million hectares, 2 percent down from last month, and the same as last year. Yield is forecast at 675 kilograms per hectare, down 0.4 percent from last month and down 3 percent from last year. Analysis of satellite imagery suggests cotton cropland losses at around 200,000 hectares. The crop is at various development stages ranging from early vegetative to advanced maturity, and vegetative indices indicate that most upland cropping areas, away from the flooded areas, benefited from abundant soil moisture profiles.

Written by makanaka

September 28, 2010 at 01:22