Posts Tagged ‘Soyabean’
The 2015-16 fourth advance estimates for commercial crops, when compared with the annual averages for five year and ten year periods, visibly displays the need for more rational crop choices to be made at the level of district (and below), in agro-ecological regions and river sub-basins.
For this rapid overview of the output of commercial crops for 2015-16 I have compared the Fourth Advance Estimates of agricultural production, which have just been released by the Ministry of Agriculture, with two other kinds of production figures. One is the five-year average until 2014-15 and the second is the ten-year average until 2014-15.
While a yearwise comparison is often used to show the variation in produced crops (which are affected by price changes, policies, adequacy of the monsoon and climatic conditions), it is important to compare a current year’s nearly final crop production estimate with longer term averages. Doing so allows us to smooth the effects of variations in individual years and so gauge the performance in the current year against a wider recent historical pattern. (See ‘How our kisans bested drought to give 252.2 mt’.)
The output of the nine oilseeds taken together is less than both the five-year and ten-year averages. Significant drops are seen in the production of soyabean, groundnut and mustard and rape – these three account for 88% of the quantity of the nine oilseeds (castorseed, sesamum, nigerseed, linseed, safflower and sunflower are the others). Between the fibre crops – cotton, and jute and mesta – the output of cotton is considerably under the five-year average, while that of jute and mesta is under both the five and ten year averages.
It is in the figures for sugarcane that the message lies. The 2015-16 output of sugarcane is marginally above the five-year average and handily above the ten-year average. This needs to be considered against the background of two drought years (2014 and 2015) and the drought-like conditions that were experienced in many parts of the country during March to May 2016.
As these are near-final estimates, this only means that the allocation of water for such a large crop quantity – 352 million tons of sugarcane is about 100 mt more than the foodgrains output of 252 mt – was assured even during times of severe shortage of water.
This is a comparison that needs urgent and serious study, not with a view to change overall policy but to decentralise how crop – and therefore inputs and water – choices are determined locally so that self-sufficiency in food staples and the sustainability of cash crops can be achieved. These are quantities only and do not tell us the burdens of inputs (chemical fertiliser, hazardous pesticides, malignant credit terms) or the risks (as cotton cultivators have experienced this year) but where these are known from past experience their effects can well be gauged.
The International Grains Council’s monthly Grain Market Report for 2013 October finds its grains and oilseeds index down 16% from the same period a year ago because, as the IGC has said, “the supply outlook for grains, rice and oilseeds markets is significantly more comfortable than last year”.
The IGC has raised the output forecast for total grains (wheat and coarse grains) in 2013-14 by 10 million tons this month, to 1,940 mt, up 8% from the same period last year. Demand is also expected to rise, but by a slower 5% compared to the same period a year ago. The IGC has said that “inventories are seen recovering by 39 mt to a four-year high at the end of 2013-14”.
The global trade forecast is raised by 3 mt, to 273 mt, which will exceed the previous record in 2010-11. Hence the question ought to be: if the international trade in grain collects, moves and processes just under 15% of the world’s total grain, why do prices in our local wholesale and retail food markets get influenced so much by what the IGC’s monthly report describes? This is not an answer you can expect given to you with honesty and concern from your local administration, much less from the food retail and industrial agriculture representatives.
For the major grains, here are the IGC summaries. Wheat output is expected to rise by 6% in 2013-14 from the level of a year ago and closing stocks are seen up by 7 mt, at 182mt, although this would still be below the level seen in 2011-12. The 2013-14 forecast for the global maize harvest has been raised by 5 mt this month to a record 948mt, and stocks are seen recovering to a 13-year high of 152 mt.
Rice is considered by the IGC to be “mixed, with good export demand and weather-related crop worries underpinning values in Vietnam, but Thailand’s prices fell further on limited buying interest and pressure from heavy intervention reserves”. Rice output for 2013-14 is forecast up 1% from a year ago, with world ending stocks expected to rise for a ninth consecutive year. (The IGC’s report for 2013 October is available here.)
The UN Food and Agriculture Organisation’s (FAO) Agricultural Market Information System (AMIS for short, although whether it Francophonically proves to be an ‘ami’ of the cereal trader or the food consuming household we shall know in the months to come) has released its Market Monitor Number 3 which is for 2012 November.
Here, in a bland paragraph that tells us nothing about the travails of households budgeting for their evening bread, ‘roti‘, or rice, the AMIS Market Monitor has said: “World supply and demand situation continues to tighten for wheat and maize but rice and soybeans have eased.”
Here’s the rest of the snapshot paragraph: “In recent weeks, unfavourable weather conditions affecting some winter wheat growing areas in the northern hemisphere and maize and soybeans in the southern hemisphere have become a concern. In addition, contradictory reports about possible export restrictions by Ukraine also influenced the market.”
What I find useful is that the tables provided now include the USDA estimates and the IGC estimates. And moreover, in a generous display of collegial latitude (perhaps the AMIS has its good points after all) the Monitor has included the IGC index chart alongside the FAO index chart.
But as the World Food Programme (WFP) tirelessly warns, From Africa and Asia to Latin America and the Near East, there are 870 million people in the world who do not get enough food to lead a normal, active life (see the WFP’s hunger map here in English, en français, en español. What does that do to households who are not the primary audience of the AMIS?
This report from IRIN has said that now in Pakistan, more than half of households are food insecure, according to the last major national nutrition survey. The prices of staple grains like wheat and rice have been stable but are “significantly higher” than 2011, according to the World Food Programme’s (WFP) October 2012 Global Food Security Update. A 25% rise in fuel prices has also pushed up the price of food, as it becomes increasingly expensive to transport. WFP says rising food prices in international markets recently may also lead to price hikes in Pakistan. Clearly, we need to find a way to filter the AMIS outputs (or screen its inputs) so that the Monitors are more directly useful to houseolds and their struggle to find enough healthy food at affordable prices.
The national drought summary for the USA at the beginning of July 2012 shows how relentless the advance of the great dry has been in the country. Drought conditions are present in 56% of the continental USA, according to the weekly Drought Monitor. That’s the most in the 12 years that the data have been compiled – it was 55% in August 2003.
The Drought Monitor report said arid conditions intensified in large sections of the country, with only southern Texas reporting some improvement. “Light precipitation (0.5 inch or less) fell on most areas of dryness and drought, with only scattered areas reporting more than an inch, primarily in the northern Plains, lower Mississippi Valley, southernmost Great Lakes region, Appalachians, mid-Atlantic region, and southern Texas,” said the summary. “Unfortunately, where rain did fall (outside southern Texas), it was not enough to make up for blistering heat that covered the Nation’s midsection, reaching the central and southern Atlantic Coast by the end of the workweek.”
Both the number of record highs in the past week, (See ‘Climate change truth wallops USA hard’) and the areas with record and near-record dryness over the last one to three months are numerous. The increasing dryness is beginning to take a significant toll on crops, pastures, and rangelands. In the primary growing states for corn and soybeans (18 each), 22% of the crop is in poor or very poor condition, as are 43% of the pastures and rangelands and 24% of the sorghum crop. In addition, the area burnt by wildfires expanded significantly. Over 1.9 million acres have been engulfed since the start of the year, and an increase of 38% in just the past week. [The Drought Monitor pdf map is available here.]
The International Grains Council (IGC) has released its grains market report for February 2012. In its market commentary, which is a cogent 250-word summation of 1,840 million tons of produce and where it will go, the IGC has said:
Grain and oilseed markets mostly strengthened in the past month, the IGC daily index (GOI) up 6% to near four-month highs. The upturn reflected concerns in early February about maize and soyabean crops in South America, as well as the impact of the recent severe cold spell in parts of Europe and the CIS. Moreover, after a very high rate of shipments from the Black Sea region in the first half of the season, sales activity declined, with US grain, in particular, attracting much more buying interest.
Wheat export prices in Europe climbed by some 8%, in somewhat tighter markets, with reports of logistical problems and possible future export restrictions in the Black Sea region (though denied), seen as potentially bullish. However, global supplies appear ample, with the likelihood that a portion of upcoming large South Asian wheat harvests will be offered for export. US maize (corn) values remained firm, supported by reports of crop losses in South America and active export interest for remaining old crop supplies, although forecasts of a further rise in US plantings this spring added a bearish element.
Oilseed prices rallied strongly in the past month, reflecting worries about the final outcome of soyabean crops in Argentina and Brazil, good demand for US supplies, including a new trade deal with China, and rising crude oil values. International rice market trends were more mixed, with Thai prices supported by domestic support measures but those in Vietnam, especially broken grades, easing to compete with South Asian offers.
The IGC’s sectoral advice is:
Grains: The world production estimate is lifted by 11m. tons, to 1,841m., largely because of upward revisions in Australia, Kazakhstan, Ukraine, India and Brazil, the latter because losses of its main maize crop will likely be more than compensated by a larger second crop. These upward revisions outweigh a reduced maize figure for Argentina. To an extent, the forecast of world consumption is adjusted higher to reflect the bigger crop estimates, with total use of grains placed 5m. tons above the January forecast, at 1,836m. The change is mainly for feed use, now put at 775m. tons, 4m. more than before and 4% higher than in 2010-11.
Of particular interest is the marked slowdown in the annual increase in industrial use, expected to rise by only 2% this year, with ethanol use of maize in the US set to recede slightly from its peak in 2011. While the latest statistical forecasts of supply and demand suggest that, nominally, global carryover stocks will rise slightly in 2011-12 from last year’s low figure, to 378m. tons (373m.), the total carryover in the eight major grain* exporters is still expected to dip by 6m. tons, to 131m., the smallest figure since 2007-08.
Wheat: A further increase in the global wheat production estimate for 2011-12, to 695m. tons (653m.), boosts total availabilities to 892m., their highest ever. Projected food and industrial consumption are both revised lower this month, but attractive prices, particularly compared with maize, lift the forecast of feed use by 2m. tons, to 131m. (115m.), the most since the early 1990s. Strong feed wheat demand is reflected in the global trade figure, helping to lift total wheat trade to match the 2008-09 peak, at 136.8m. tons (125.7m.). Even though total consumption is growing at a faster than average pace, world stocks are projected to rise to 211m. tons (196m.), eclipsing the previous record in 1999-00.
Maize (Corn): Maize production in 2011-12 is expected to increase by 4%, to a record 864m. tons. The US crop, while disappointing, was slightly above average, and bumper harvests were collected in China, Ukraine and the EU. A severe drought has reduced yield prospects in South America, especially in Argentina, but Brazil remains on track to produce a record crop. Improved supplies in some countries are boosting consumption, with overall use forecast at a record high. Feed use of maize is expected to increase at a faster than average pace but, with US ethanol production likely to decline slightly, the rise in industrial demand will be below trend. With demand outpacing the increase in supplies, ending stocks are forecast to tighten further, including in the US. Amid solid buying by a number of importers, world trade is forecast to rise to a four-year high.
Barley: Better than expected 2011-12 harvest results, including in Argentina and Australia, lift the estimate of world barley production by 1.1m. tons compared with last month, to 134.7m. World consumption is expected to remain steady, contained by uncompetitive prices in the feed sector, especially in the EU, and by sluggish growth in brewing demand. While higher than previously forecast, carryover stocks are set to remain tight, particularly in the EU and North America. The projection of world trade is raised by 1.2m. tons, to a three-year high of 17.8m., with a steep upturn in buying by Saudi Arabia.
Rice: Due to increases in Asia’s biggest producers, China and India, global rice output is projected to rise by 3% in 2011-12, to 463m. tons. The record outturn will be accompanied by a further expansion in demand, to 460m. tons (449m.), but the 2011-12 carryover is still expected to increase by 4%, to 99m. Much of the forecast rise in global stocks will be due to increases in the major exporters, notably in India and Thailand, seen 14% higher, at a record 32.7m. tons. World trade in 2012 is forecast to contract by 7%, to 32.2m. tons, owing to significantly reduced purchases by key Asian buyers, including Bangladesh and Indonesia.
The International Grains Council has released its grain market report for November 2011. As this will be the IGC’s last report for the year, grain traders in the major exporting countries and buying countries will use this as their end-2011 reference. Here are the main forecasts by the IGC for major crops:
Market commentary – After showing some strength in early November, global grain export prices were again in retreat, though with rice once more the exception. Overall, IGC’s GOI index fell by 16 points, or 6%, to a 13-month low. The recent market downturn can be partly ascribed to bearishly perceived market fundamentals, as harvests neared completion in the northern hemisphere and work started south of the equator. But it was also in reaction to deepening financial uncertainties, notably in Europe, affecting nearly all commodities. Heavy supplies of wheat amid strong export competition, including from new crop grain out of Argentina and Australia, mostly reduced fob values by between $20 and $30 over the past month, narrowing the gap with Black Sea quotations.
Despite initial support from US cash markets and a smaller official crop estimate, CME maize futures in Chicago saw major speculative selling, partly due to increased competition from other exporters but with sentiment considerably dented by worries about the global financial crisis and the collapse of a major brokerage firm. Similar pressures were evident in oilseed markets, led by a decline in US soyabeans, values of which dipped to their lowest since October 2010. As measured by IGC’s sub-index for rice, export prices of this cereal remained firm in the past month: within this measure, quotations in Thailand saw further gains, attributed to the country’s severe floods, while those in Vietnam and South Asia weakened.
Grains – Reduced grain crop estimates for some major producers, including for maize in the US, are only partly offset by increases in the CIS and elsewhere, trimming the global production total for 2011-12 by 3m. tons from October, to 1,816m. This would still represent an increase of 64m. tons over last year, largely due to sizeable recoveries in output in Russia, Ukraine and Kazakhstan. Production of all crops except sorghum will rise this year, with the biggest increases in wheat and maize. Southern hemisphere prospects remain favourable, with rains in South America and Australia mostly boosting yield expectations for wheat and helpful for plantings of maize and sorghum. Consumption of grains will also increase in 2011-12, especially in the feed sector, including a marked rebound in Russia after the previous year’s drought.
At 1,826m. tons, world use is expected to show a rise of 2.2% from the previous year. However, a feature this year will be the marked slowdown in the expansion of industrial use, set to rise by only 1.7%, to 303m. tons. Within this figure, the use of grains in fuel ethanol, which has displayed huge growth in the past decade, is expected to stay close to last year’s 147m. tons, assuming the use of maize for this purpose in the US declines slightly. With the reduction in the global grain crop estimate largely balanced by an upward adjustment in the opening stocks figure and a slight cut in the use forecast, the projection of world carryover stocks is unchanged from last month, at 360m. tons.
However, the total for the eight major exporters is trimmed by 3m. tons, largely because of a reduced stocks projection in the EU. World trade in grains in 2011-12 (July-June) is expected to climb by 11m. tons to a record 254m., 4m. more than forecast previously, reflecting larger than anticipated wheat purchases after this season’s marked upturn in medium and lower grade supplies, especially from the Black Sea region, whose total grain shipments are set to total 55m. tons, up from only 22m. last year.
Wheat – The second largest world wheat crop ever and ample carry-in stocks from last year, have sharply boosted global availabilities in 2011-12. While use is rising at a faster than normal pace, world stocks at the end of the season are still expected to climb to their highest level in a decade. Compared with last month, the estimate of world production is 1m. tons lower, at 683m., including a slight downward revision in the US, where the spring wheat crop was even smaller than expected.
Stronger than previously projected feed use adds another 2m. tons to the global consumption forecast, at 679m., boosting the annual percentage increase to about three times the longer-term trend. Because of the increased demand figure, the forecast of global carryover stocks is 2m. tons lower than last month, at 200m., but these would still be the largest since 2001-02. The world trade forecast is lifted by 3m. tons from before to nearly 135m., only slightly below the 2008-09 record. Rather than reflecting a supply shortfall in any one country or region (as it did in 2008-09, when Iran’s imports were higher than usual), import demand appears strong in a wide range of countries, aided by competitive pricing in the major exporters, especially for lower and medium grades.
Maize (corn) – While the US crop was slightly smaller than last year’s, larger outturns elsewhere are expected to lift world maize production to a new record of 853m. tons (826m.). With harvests in North America and Europe entering their final stages, attention is switching to the southern hemisphere, where farmers in Argentina, Brazil and South Africa are set to plant more maize than in 2010-11. Due to strong competition from feed-grade wheat and projected sluggish growth in industrial demand, world use is forecast to increase at a slower than average pace. However, with the total still expected to exceed output, 2011-12 ending stocks are forecast to fall to a five-year low. Trade in the year to June 2012 is forecast to increase by 1% due to strong demand from buyers in parts of Latin America, Asia and North Africa.
Rice – Flooding in parts of Asia has negatively affected crop prospects in some key exporters. Nevertheless, bigger outturns in China and India are expected to lift global production by 2% in 2011-12, to a record 459m. tons. Total rice use is also forecast to expand by 2%, with a further small increase projected in the global carryover, to 100m. tons (98m.). Within the total, inventories in the five major exporters are forecast to increase by 8%, to an all-time peak of 32m. tons. World trade in calendar 2012 is forecast to contract by 0.8m.tons, to 32.5m., on reduced imports by Far East Asia, especially by Bangladesh and Indonesia.
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.
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.
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 ]
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%.
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.
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.