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World crop estimates in June – lower wheat, corn and coarse grain, rice mixed

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Here it is, just released. The World Agricultural Supply and Demand Estimates (WASDE) of the USDA, 09 June 2011. Highlights and key points for the major crop groups follow:

Global wheat supplies for 2011-12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0 million tons and 5.0 million tons, respectively, for 2009-10 and 2010-11. Beginning stocks for 2011-12 are also raised 0.5 million tons each for Argentina and Canada with the same size reductions in 2010-11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for 2011-12 beginning stocks for Australia with higher 2010-11 exports.

World wheat production is projected 5.2 million tons lower for 2011-12. At 664.3 million tons, production would be the third highest on record and up 16.1 million from 2010-11. This month’s reduction for 2011-12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent dryness, particularly in France, but also in Germany, the United Kingdom, and western Poland, has reduced yield prospects for EU-27. Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million tons for Australia, both reflecting favorable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5 million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.

Global wheat trade for 2011-12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use.

Global coarse grain supplies for 2011-12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced U.S. corn production, lower EU-27 barley production, and reduced corn beginning stocks in China, more than offset increases in China corn production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced yield prospects in the major producing countries. China corn area is raised for 2010-11 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011-12 largely maintained.

China corn production increases 5.0 million and 6.0 million tons, respectively, for 2010-11 and 2011-12 with yields unchanged month-to-month. More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn consumption is raised 8.0 million tons and 13.0 million tons, respectively, for 2010-11 and 2011-12. Together these changes leave projected 2011-12 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China’s stocks would be down 2.7 million tons from 2010-11 and just below the levels of the preceding 2 years, better reflecting the continuing rise in domestic corn prices as production struggles to keep pace with rising usage. Although China’s stocks represent 46 percent of the world total for 2011-12, China is not expected to be a significant exporter.

Global 2011-12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised 1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower production. Other important trade changes this month include a 0.2-million-ton increase in sorghum imports by Mexico, driving the U.S. export increase, and a 1.5-million-ton reduction in EU-27 barley exports with lower production and tighter supplies. Barley imports are lowered for Saudi Arabia and China. Global corn ending stocks for 2011-12 are projected down sharply this month, falling 17.3 million tons mostly reflecting the usage revisions in China. The projected 5.2-million-ton drop in U.S. ending stocks accounts for most of the rest of the decline. Global corn stocks are projected at 111.9 million tons, the lowest since 2006-07.

Global 2011-12 rice supply and use are lowered from a month ago. Global production is projected at a record 456.4 million tons, down 1.5 million from last month’s forecast, primarily due to a decrease for China. Additionally, production projections are raised for Egypt and Guyana, but lowered for the United States and Cuba. China’s 2011-12 rice crop is projected at 138.0 million tons, down 2.0 million from a month ago; primarily due to the impact of prolonged drier-than-normal weather in the Yangtze River Valley affecting mostly early rice. Egypt’s crop is increased 0.9 million tons to 4.0 million due to a 33 percent increase in area—based on a recent report from the Agricultural Counselor in Cairo. The global import and export forecasts for 2011-12 are little changed from last month. Global consumption for 2011-12 is lowered 0.8 million tons, primarily due to lower consumption expected in China, but partially offset by increases for Egypt, EU-27, and Vietnam. Global ending stocks for 2011-12 are projected at 94.9 million tons, down 1.3 million from last month, due primarily to reductions for China and the United States which are partially offset by increases for Egypt, the Philippines, and Vietnam.

Global oilseed production for 2011-12 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production is reduced 1.2 million tons to 18.8 million mainly due to lower yields resulting from dry conditions in April and May in major producing areas of France and Germany. Rapeseed production for Canada is lowered 0.5 million tons to 13.0 million due to reduced area planted resulting from excessive moisture this spring. China soybean production is reduced 0.5 million tons to 14.3 million reflecting lower area as producers shifted to corn. Other changes include increased sunflowerseed production for Russia, and reduced cottonseed production for Australia, Pakistan, and the United States. Brazil’s 2010-11 soybean production is increased 1.5 million tons to a record 74.5 million, reflecting yield and production increases reported in the most recent government survey. [Get the full WASDE report here.]

Grain market report, February 2011

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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%.