Feed Materials Commentary
By Roger Dean
In its latest, April projection, the United States Department of Agriculture (USDA) has increased its estimate of world wheat production in 2017-18 by a modest 962,000 tonnes or 0.1 per cent; principally caused by an upgrade of production prospects in Morocco, there is also a 100,000 tonne or 0.4 per cent increase for wheat production in Pakistan. End-of-season wheat inventories have been increased by 2.3
million tonnes or 0.9 per cent, despite substantial reductions in projected end-of-season stocks in both Russia and the EU; Iranian wheat stocks are estimated to have increased significantly. In contrast, world maize production during the 2017-18 season
has been downgraded significantly, by 5.7 million tonnes or 0.5 per cent compared to USDA’s previous projection in March. Much of the reduction is accounted for by reduced output in Argentina, at 33 million tonnes, down by 3 million tonnes or 8.3 per cent; production is estimated to be down by 20 per cent from last year. The area planted to maize is estimated at 5 million hectares, 4 per cent lower than last month but 2 per cent higher than last season. The estimated yield of 6.60 tonnes per hectare is 5 per cent below last month’s yield and a massive 21 per cent lower than last year with both early-planted and late-planted crops affected by heat and drought. Despite rain in late January, inadequate rainfall during February and March has lowered production expectations. Maize production in 2017-18 in Brazil is projected at 92 million
tonnes, down by 2.5 million tonnes or 2.6 per cent compared to USDA’s March estimate; it is also 6.5 million tonnes or 6.6 per cent down on the total for 2016-17. The harvested area is estimated at 17.1 million hectares, down
0.5 million hectares or 3 per cent compared with both USDA’s March estimate and the outcome in 2016-17. Yield is estimated at 5.38 tonnes per hectare, up slightly from USDA’s March projection but 4 per cent less than 2016-17. According to CONAB, the Brazilian national crop agency, first-crop maize yields are near the 5-year average. Area is lower for the first and second-corn crops as producers opted instead to plant either soybeans or cotton for higher financial returns. However, the delayed soybean harvest caused producers to
plant a later - and riskier - second crop of maize or not to plant at all, according to farmer interviews carried out in the field by USDA. Early planting provides the crop more time to benefit from seasonal rain during the reproductive stages. Harvest of first-crop maize is underway and planting of second-crop maize has been completed in the Centre-West and Southern regions, which constitute 94 per cent of second crop maize crop production. Satellite imagery indicates very good vegetative health for the second crop so far this season. The majority of second- crop maize is harvested from June to September. As regards soybeans, USDA’s April update projects world production in 2017-18 at 334.8 million tonnes, 6.1 million tonnes or 1.8
PAGE 20 MAY/JUNE 2018 FEED COMPOUNDER
per cent less than in USDA’s March projection. Additionally, it is also almost 16 million tonnes or 4.5 per cent less than in 2016-17. The major part of the decline in April compared to USDA’s
March projection reflects conditions in Argentina. The area planted to soybeans is currently estimated at 17.5 million hectares, down 3 per cent from USDA’s March estimate and down 5 per cent from 2016-17. Yield is estimated at 2.29 tonnes per hectare, down 12 per cent from last month and down a massive 27 per cent from last year. Dry soils slowed late first-crop and second-crop plantings until rains began in late January. The limited rainfall since then has lowered yield potential for the late-planted crop. Argentina soybeans had ‘one of the most difficult seasons in
recent history during 2017-18’ due to limited rainfall and what USDA describes as ‘unseasonable warmth’, with a number of provinces showing significantly lower satellite - derived vegetative indices (SDVI) compared to previous seasons. This is a new technology that is coming rapidly into use. In contrast, soybean production in Brazil for 2017-18 is estimated
at 115 million tonnes, up by 2 million tonnes or 1.8 per cent from USDA’s March estimate and up 900,000 tonnes or 0.8 per cent from last year.
Harvested area is estimated at 35 million hectares, unchanged
from last month’s estimate but up by 1.1 million hectares or 3 per cent from last year. Soybean yield is estimated at 3.29 tonnes per hectare, up 2 per cent from last month but down 2 per cent from last year. Nationally, it is reported that more than two-thirds of the Brazilian soybean crop has been harvested, with the harvest completed in Mato Grosso. In Parana and Rio Grande do Sul, the crop is respectively 84 and 20 per cent harvested, according to government and industry sources. However, drought in southern Rio Grande do Sul has reduced yields. Soybean production in Brazil has been given an extra boost this
year by the exceptionally good rains that occurred in the north and north-eastern regions. The NDVI from satellite imagery indicated very good vegetative health in these regions during the growing season and yields from these regions are expected to be at above-average or even record levels. World end-of-season soybean inventories have been reduced
from 94.4 million tonnes in USDA’s March estimate to the current, April estimate of 90.8 million tonnes, a decline of 3.8 per cent. The major drawdown is, predictably, to take place in Argentina with a 600,000 tonnes drawdown in Brazil, this is likely to reflect regional influences. As regards soybean meal, USDA have reduced their estimate of
production by 1.6 million tonnes or 0.7 per cent; this largely reflects the lower availability of soybeans in Argentina. In early April, No. 2 US yellow soybeans were quoted at $388.80
a tonne FOB with Brazilian soybeans at $415.60 FOB Paranagua, slightly up on the levels of a month earlier. No month-earlier quotations were available for US material. For soybeans, the market influences suggest some underlying upward pressure on prices, notably in Latin America but there seems to be little equivalent pressure on feed wheat or maize.
USDA’s next projection, due in early May, will constitute the first
estimate of the supply and demand position for grains and oilseeds in 2018-19. The International Grains Council is expected to report imminently on its current estimate of 2018-19 prospects.
Comment section is sponsored by Compound Feed Engineering Ltd
www.cfegroup.com
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