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Feed Materials Commentary


By Roger Dean


Agrimoney, the global site for news and analysis of what’s happening in agricultural commodities and agribusiness, has recently noted that agricultural commodity markets have, for the first time ever, notched up nine successive months of gains, and posed the question of whether they would manage a tenth successive increase. The trend noted by Agrimoney is reflected in the International


Grains Council’s index which has showed a sustained increase from June 2020. The Grain and Oilseeds Prices Index in February 2021, at 272 (January 2000 = 100) was 43.3 per cent ahead of February 2020, reflecting year-on-year changes ranging from 59.4 per cent for soybeans, 48.6 per cent for maize and 24.1 per cent for wheat. The International Grains Council’s latest assessment, published on


25 February 2021, shows that mainly because of larger than previously estimated wheat crops in Australia, Kazakhstan and Russia, the global forecast for total grains production in 2020-21 has been increased by 6 million tonnes compared with the previous month’s projection, to 2,216 million tonnes. However, overall consumption has been increased by broadly the same amount, leaving the figure for total world grain inventories at the same level as in the previous month’s assessment, at 611 million tonnes; this represents a projected drawdown of 6 million tonnes compared to the previous twelve months. The International Grains Council’s latest update to supply


and demand prospects for wheat in 2021-22 sees no change in its production projection from its previous one, still estimated at a record 790 million tonnes, up by 2 per cent compared to the previous twelve months. As forecast wheat consumption is raised based on a higher figure for feeding, the outlook for world wheat stocks is slightly lower but is still projected to be at a new peak. Prospects for favourable returns could see the world area planted to maize increase for a third successive season to a record high. Tied to bigger harvests in the US and Brazil, world soyabean production


in 2020-21 is seen rising by 6.5 per cent year-on-year to 360 million tonnes, marginally short of the peak production achieved in 2018- 19. With feed demand seen as underpinning gains in soya meal use, particularly in Asia, as well as modest increases in the uptake of soyabean oil in food and industrial sectors, consumption could expand by 4 per cent year-on-year to a new high. At 45 million tonnes, inventories are seen contracting by 11 per cent, including a sizeable fall in the major exporters; this is linked to prospects for a near-80 per cent decline in US inventories after that country’s record-breaking export campaign. The International Grains Council’s preliminary outlook for wheat supply and demand in 2021-22 is for record production, consumption


PAGE 14 MARCH/APRIL 2021 FEED COMPOUNDER


and stocks, but a moderate decline in trade. The projection includes better harvests in Europe, North Africa and India, with global wheat production seen as climbing to a new high of 790 million tonnes. Demand for wheat is seen as boosted by rising use as livestock feed, reflecting tightening supplies of alternatives including maize and barley. Further inventory growth is envisaged but this will likely again be mainly in China and India. After the elevated levels of 2020-21, a decline in shipments to China and Pakistan contribute to a projected lower volume in world wheat trade. The Foreign Agriculture Service of the US Department of


Agriculture is responsible for preparing a great deal of information on world trade in agricultural commodities and the latest data was published on 9 February 2021. World wheat production in 2020-21 is projected by USDA at


773.44 million tonnes, 793,000 tonnes or 0.1 per cent more than in the previous month’s projection. The largest contributor to the admittedly small increase in


percentage terms is the additional 1.76 million tonnes from Kazakhstan. USDA currently estimates Kazakhstan wheat production for 2020-21 at 14.3 million tonnes, up 14 per cent from the previous month’s estimate and up 24 per cent from last year. Yield is estimated at 1.18 tonnes per hectare, up 11 per cent from last month, and up 17 per cent from last year. Harvested area is estimated at 12.1 million hectares, up 2 per cent from last month’s projection, and up 7 per cent from last year. The preceding statistics are derived from final official data from the


Kazakhstan National Bureau of Statistics which was released early in February and the year-to-year increases in both area and yield it cites are largely due to the recovery from last year’s drought. Very significant increases in current wheat consumption are


envisaged by USDA, including China and India, up by 5 million tonnes and 3.5 million tonnes respectively. When these increases in consumption are taken into account, end of season inventories are projected to fall by almost 9 million tonnes or 2.9 per cent. World production of maize, at 1,134 million tonnes, is projected to


be a marginal 163,000 tonnes higher than USDA’s previous monthly projection. South Africa, with production of 16.5 million tonnes, is showing an increase of half-a-million tonnes or 3.1 per cent on USDA’s previous projection. The latter forecast includes output from both the developing and commercial sectors, with the commercial sector accounting for approximately 97 per cent of the total crop. Area is estimated at 3.1 million hectares, up 3 per cent from last month’s projection and up 7 per cent from last year. Yield is forecast at 5.32 tonnes per hectare, down 3 per cent from last year but up 8 per cent from the 5-year average. A number of other countries account for a 337,000 tonnes fall in maize production. The net effect of changes in maize production and consumption is


projected to be a slight increase in inventories amounting to 2.7 million tonnes or 1 per cent. USDA has made only minor changes to its projection of world


soybean production in 2020-21, amounting to just 75,000 tonnes, all taking place in a variety of minor producers.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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