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Feed Materials Commentary


By Roger Dean


The latest currently available Grain Market Report (GMR 496) from the International Grains Council, emerged on 21 February. World wheat and coarse grains production is forecast to fall by 20


million tonnes in 2018-19 to a three-year low of 2,121 million tonnes, as higher maize output is outweighed by declines for other crops, especially wheat. With consumption predicted at a new peak, global stocks are seen contracting for a second successive year, leading to the ratio of stocks-to-use of 27.3 per cent as against 30.0 per cent previous year, the tightest since 2014-15. Preliminary projections for wheat in 2019-20 are for an improved world harvest, but with increased supply absorbed by consumption growth, leaving end-of-season stocks about steady year-on-year. In the US, the scheduled release by the United States Department


of Agriculture (USDA) of updated world crop forecasts on Friday 11 January was disrupted by the dispute between President Trump and the US House of Representatives over the funding of President Trump’s wall, resulting in a US government ‘shutdown’. As a result, no Production, Supply and Distribution data (PSD) was released as scheduled in January, eventually emerging on 8 February. USDA projected a 1.33 million tonne increase in world wheat


production compared with their previous, December estimate. Russian wheat production for 2018-19 is estimated at 71.6 million tonnes, down 13.4 million tonnes from the 2017-18 crop which was a record. The current estimate excludes about half a million tonnes of estimated output from Crimea, annexed by Russia from Ukraine. Harvested area for total wheat is estimated at 26.2 million hectares.


Total wheat yield for Russia is estimated at 2.73 tonnes per hectare, a figure which is the second highest yield on record; it reflects especially favourable conditions during the growing season. USDA’s latest estimate of Argentina’s wheat production in 2018-


19, at 19.2 million tonnes, is down less than 2 per cent from December’s estimate and up 4 per cent from last season. The area planted to wheat, at 6.1 million hectares, is down 2 per cent from December’s estimate but up 5 per cent from the previous season. Yield is estimated at 3.15 tonnes per hectare, down 3 per cent from December and down 1 per cent from last year. The season started with adequate subsoil moisture during


emergence and establishment, but rains stopped and only began again during the beginning of grain fill. Dryness in Cordoba province reduced yield potential. Late-season rains are reported to have impeded harvest progress in Santa Fe province and in the northern regions of the country. USDA’s latest assessment has reduced the Chinese wheat harvest


from 132.5 million tonnes to 131.43 million tonnes, a reduction of 1.07 million tonnes or 0.8 per cent. USDA’s latest assessment suggests that the world’s total maize


harvest in 2018-19 may be marginally smaller than the previous crop; at 1,099.6 million tonnes, this is just 301,000 tonnes less than USDA’s December assessment. However, this overall total contains major adjustments compared to USDA’s December assessment.


PAGE 10 MARCH/APRIL 2019 FEED COMPOUNDER


The largest adjustment is for the US where the projected maize


harvest for 2018-19 has been reduced by 5.23 million tonnes to 366.29 million tonnes, a reduction of 1.4 per cent on USDA’s December projection. While this reflects a very small reduction in the area harvested to maize (81.7 million acres as against the December area of 81.8 million acres) there is a more significant decline in the projected yield per harvested acre. In December, USDA was looking for 178.9 bushels per harvested acre (4.54 tonnes per acre); the February projection is assessed at 176.4 bushels (4.48 tonnes). South African maize production has been reduced by half a


million tonnes to 11.5 million tonnes, down by 4 per cent compared to USDA’s December assessment and down by 2.0 million tonnes - 15 per cent - from 2017-18. The area planted to maize in South Africa is estimated at 2.4 million hectares, unchanged from December’s projection and down 0.23 million hectares or 9 per cent from last year. Yield is forecast at 4.8 tonnes per hectare, down 4 per cent from December’s projection and down 7 per cent from the last crop year. This is understood to reflect below average seasonal rainfall for most of South Africa’s maize growing area during the planting season from October through January. Romanian maize production for 2018-19 is estimated at a record


14 million tonnes, up 0.5 million tonnes or 4 per cent from December’s projection, up 2.1 million tonnes - 18 per cent - from last year, and 31 per cent above the 5-year average. Area is estimated at 2.4 million hectares, unchanged from December, down 100,000 hectares or 4 per cent) from last year, and down 6 per cent from the previous five years’ average. Yield is estimated at a record 5.83 tonnes per hectare, up 4 per cent from December, up 23 per cent from last year and up 39 per cent from the five years average. USDA estimates Ukraine corn production for 2018/19 at a record


35.5 million tonnes (mmt), up 0.5 mmt from December, up 11.4 mmt from last year and 4.6 mmt above the previous record crop which was harvested in 2013. Harvest was complete in December. The estimated harvested area is 4.55 million hectares, up 50,000 hectares from December. Yield is estimated at a record 7.80 tonnes per hectare and is attributed to favourable conditions throughout the growing season Argentina corn production for 2018/19 is estimated at 46.0 million


tonnes, up 8 per cent from December and 44 per cent from last season. Area is estimated at 5.5 million hectares, up 6 per cent from December and 6 per cent higher than last year. Area is increased due to late planting of early-season hybrids. The estimated yield of 8.36 tonnes per hectare is 2 per cent higher than December’s yield and 36 per cent higher than last year USDA’s projections for soybeans in 2018-19 represent a significant cutback compared with the December assessment. From 369.2 million tonnes, 2018-19 production has been reduced


by 8.2 million tonnes or 2.2 per cent to 361 million tonnes. The most significant cutbacks are a 5 million tonne reduction for Brazilian production, down by 4.4 per cent, reflecting dry conditions in portions of the soybean production area. The US also has a significant reduction, amounting to 1.5 million tonnes or 1.2 per cent. Argentine production is also reduced by half-a-million tonnes or 0.9 per cent. Given the significant proportion of UK feed materials that are


imported, the exchange rate is an important ingredient in the cost of feed materials available in the UK. On average, sterling bought $1.3350 in 2018 although this had fallen to $1.2769 by the end of the year. In the event of a no-deal Brexit, it may be surmised that a further depreciation of sterling against the dollar and, to a lesser extent, the euro would be in prospect resulting, other things being equal, in a potential further rise in the sterling cost of imported feed materials.


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


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