Feed Materials Commentary
By Roger Dean
The International Grain Council’s Grain Market Report (GMR), issued on 27 February 2020 and succeeding the report issued on 23 January 2020, upgraded the Council’s prediction of total world production of grain during the 2019-20 crop year to 2,172 million tonnes, up 2 million tonnes on the Council’s January projection and ahead of the current estimate of production in 2018-19 by 30 million tonnes. Preliminary world supply and demand projections for wheat in
2020-21 are indicative of an all-time high for world wheat production and a further build-up of inventories, but with inventory growth again concentrated in China and India, this is not likely to be reflected in world prices. World maize harvested area in 2020-21 is tentatively seen as growing by 1 per cent, with growth mainly in the US, but the global area harvested to barley could be down by 1 per cent owing to potentially weaker returns for this crop. Production of soybeans worldwide in 2019-20, according to the
February 2020 issue of the Grain Market Report, is expected to fall by 5 per cent compared to a year earlier; this is despite prospects for heavy crops in South America. The major factor underlying the decline is a fall in US output described as ‘a plunge’ in the latest International Grain Council’s report. However, while global soybean stocks are currently seen as dropping by almost 30 per cent on year earlier levels, reflecting an anticipated rebound in the US, the global 2020-21 global soybean area for harvesting is projected to be up by 4 per cent. The United States Department of Agriculture’s Foreign Agricultural
Service has reduced its projection of world wheat production during the 2019-2020 crop year by 440,000 tonnes as production prospects in the main wheat growing counties became more certain. A significant proportion of the reduction was accounted for by Morocco where wheat production for 2019-20 is estimated at 4 million tonnes, down 400,000 tonnes or 9 per cent from FAS’ January projection and down 34 per cent below the 5-year average. The area planted to wheat is estimated at 2.75 million hectares, unchanged from the previous month’s projection but down 100,000 or 4 per cent from 2018-19 and 7 per cent below the 5-year average. Yield is estimated at 1.45 tonnes per hectare, down 9 per cent from last month, down 44 per cent from 2018-19, and 27 per cent below the 5-year average. World wheat consumption in 2019-20 is projected at 754.2 million
tonnes, down 180,000 tonnes or marginally less than in FAS’ January projection. The largest fall in projected consumption is in the EU, down by half-a million tonnes on FAS’ January projection. Taking changes in forecast production and consumption into account, global world wheat inventories are projected to decline by insignificant amounts with falling US and EU wheat stocks counterbalanced by a sharp increase in Chinese inventories. USDA has increased its projection of world maize production by
750 million tonnes, largely reflecting increased production in South Africa and Ukraine. Maize production in the latter country during the 2019-20 season
is estimated at 35.8 million tonnes, up 1 per cent from last month’s projection, but slightly down from last year. Yield is estimated at 7.16 tonnes per hectare, down 1 per cent
from last month and down 9 per cent from last year’s record. The estimated harvested area is at 5.0 million hectares, up 2 per cent from last month’s projection and 10 per cent from last year. These data are derived from preliminary harvest data collected by the State Statistical Service of Ukraine; the harvest was completed in November. The data includes USDA estimates of production in Crimea, currently occupied by Russia. Maize production in South Africa during the 2019-20 crop year is
projected at 14.5 million tonnes, up 500,000 tonnes or 4 per cent from last month and 2.7 million tonnes or 23 per cent from last year. USDA’s forecast includes output from both the developing and commercial sectors, with the commercial sector accounting for approximately 97 per cent of the total crop. The area planted to maize is currently estimated at 2.9 million hectares, unchanged from last month’s projection but up 300,000 hectares or 12 per cent from last year. Yield is projected at 5 tonnes per hectare, up 4 per cent from last month’s projection and up 10 per cent from last year. USDA reports that rainfall in South Africa was ‘below average’ in
October which delayed planting in the eastern and central provinces, but rains improved after October and have been average to above average for most major maize producing regions. Beneficial rains from November through January allowed farmers to achieve their planted area intentions and trend yields are expected, assuming that average rains continue for the remainder of the season. USDA has adjusted its projection of world soybean production
during the 2019-20 cropping period by an additional 1.7 million tonnes, most of which is accounted for by increased production by Brazil. Brazilian soybean production is estimated at a record 125 million tonnes up 2 million tonnes or 2 per cent from last month’s projection and 8 million tonnes or 7 per cent from last year. The area planted to soybeans is estimated at a record 36.9 million hectares, unchanged from last month but up a million hectares - 3 per cent - from last year. Yields are estimated at 3.39 tonnes per hectare, up 2 per cent from last month, up 4 per cent from last year and up 6 per cent from the 5-year average. This year Brazil is also expected to overtake the US as the world’s leading soybean producer. When projected consumption of soybeans is taken into account,
world soybean stocks are projected to increase by 2.19 million tonnes compared with USDA’s January projection. With an increased soybean inventory, there would appear to be little potential for increased prices as the world moves into the 2020-21 crop year. Overall, the situation as seen through the eyes of USDA is
indicative of increasing supplies reducing the potential for increasing prices during the 2020-21 crop year. However, it must be stressed that the 2020-21 season, while it is imminent, is still subject to a great deal of uncertainty; with the potential complications posed by unusual weather conditions. It must also be born in mind that the effects of the coronavirus outbreak are, as yet, unquantifiable.
FEED COMPOUNDER MARCH/APRIL 2020 PAGE 11
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68