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Materials Commentary
By Roger Dean
The latest Grain Market Report, published by the International Grains Council on 29 October 2020, shows world grain production – wheat and coarse grains – during the 2020-21 marketing year at 2,226 million tonnes.
This represents a reduction of one million tonnes compared to
the September projection, as reduced maize output prospects, mainly in the EU, Ukraine and the USA is partly offset by bigger estimates for other grains. Although the outlook for maize demand is a little lower than before, this is compensated for by increases for wheat, sorghum and rye, lifting the forecast for total grains consumption by 3 million tonnes to 2,223 million tonnes. With smaller than previously estimated opening inventories, reduced production and higher use, the projection for global ending stocks is down by 10 million tonnes to 619 million tonnes, a modest increase year-on-year. Adjustments to old and new crop maize inventories in the USA and for wheat in the major exporters, account for much of the month on month change in projected world stocks. The forecast for world trade in 2020-21 is raised by 4 million tonnes to 403 million tonnes, mainly on higher figures for wheat, including larger imports by China and Pakistan, and maize by the EU and China. Reflecting crop downgrades for the US, Argentina, India and
Ukraine, IGC’s 2020-21 global soybean production forecast is trimmed to 370 million tonnes, 9 per cent higher year-on-year. With consumption seen marginally up from before at a new peak, end-of-season inventories are slightly reduced to 46 million tonnes. Following its September projection, involving increased wheat
production but lower projected output of maize and soybeans, the Foreign Agriculture Service (FAS) of the United States Department of Agriculture published its October projection on the twelfth of the month. World wheat output, at 773.08 million tonnes was 2.59 million tonnes
above that projected by FAS in September. The most conspicuous contributor to the increase was Russia which, at 83 million tonnes, was ahead of the FAS September projection by 5 million tonnes or 6.4 per cent. The estimate included 58 million tonnes of winter wheat and 25 million tonnes of spring wheat. Following US government policy, USDA crop production estimates for Russia exclude estimated output from Crimea. Total Russian wheat yield is estimated at 2.93 tonnes per hectare,
up 6 per cent from last month’s estimate, and up 9 per cent from 2019- 21. The total area planted to wheat is estimated at 28.3 million hectares, unchanged from last month but up 4 per cent from 2019-20. Harvest for the winter wheat season was complete as of mid-August.
Weather conditions for the winter wheat crop were mixed across the main wheat growing districts throughout the season. Currently, spring
PAGE 12 NOVEMBER/DECEMBER 2020 FEED COMPOUNDER
wheat harvest is almost complete. In contrast, Ukraine, Canada and Argentine saw wheat output decline relative to FAS’s September projection. Ukraine wheat production for 2020-21 is estimated at 25.5 million
tonnes, down 5.6 per cent from last month’s projection and down 12.6 per cent from last year. Yield is estimated at 3.75 tonnes per hectare, down 6 per cent from last month and down 10 per cent from last year. Harvested area is estimated at 6.8 million hectares, unchanged from last month’s projection but down 3 per cent from last year. Conditions were reportedly variable throughout the growing season with drier-than- average conditions throughout most of the southern regions which led to deteriorating conditions. Conditions were more favourable conditions in the northern region of the country but, ultimately, the higher yielding areas in the north were not able to offset the lower-than-average yields in southern Ukraine. USDA estimates Canadian wheat production for 2020-21 at 35
million tonnes, down a million tonnes or 2.8 per cent from last month’s estimate, but up 8.2 per cent compared to last year, and 13 per cent above the 5- year average. Harvested area is estimated at 9.9 million hectares, unchanged from last month, but up 3 per cent from last year, and 5 per cent above the 5-year average. Yield is forecast at 3.54 tonnes per hectare, down 3 per cent from last month’s projection, but up 6 per cent over last year - and 7 per cent above the 5-year average. FAS’s projection of world maize production in 2020-21, at 1,158.8
million tonnes, was 3.56 million tonnes or 0.3 per cent less than in its September projection. The largest contributor to this reduction was the US with production, at 373.95 million tonnes, down by 4.52 million tonnes or 1.2 per cent compared to FAS’s September forecast. The change follows a downward revision by the US Department of Agriculture earlier in the month after dry weather throughout August and a severe wind storm damaged crops in major maize growing areas. Production of maize in Ukraine was reduced by 2 million tonnes
or 5.2 per cent in FAS’s October projection. This reflected reduced yield, estimated at 6.76 tonnes per hectare, down 5 per cent from last month’s projection and down 6 per cent from last year. Harvested area is estimated at 5.4 million hectares, unchanged from last month but up 8 per cent from last year. The month-to-month decrease in Ukrainian maize yields is based
on early harvest results from the Ukrainian Ministry of Agriculture and reflects continued dryness and warmer-than-average temperatures in the Ukrainian corn belt throughout August and September, including the higher producing oblasts in the Forest-Steppe Zone. Yields are still expected to be the third highest on record, even with the dry conditions, due to the increased use of hybrid varieties. USDA crop production estimates for Ukraine include estimated output from Crimea. FAS has reduced its projection of US soybean production in 2020-
21 by 1.2 million tonnes or 1 per cent; this reflects a lower projection of harvested area. FAS have made no change in projected yields. Overall, the FAS projections do not suggest any sharp upturn in
grain and soybean prices but, as always, this conclusion cannot take unexpected factors into account.
Comment section is sponsored by Compound Feed Engineering Ltd
www.cfegroup.com
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