IGC Boosted World Wheat Production Due to China

Greetings! In news late last week, the International Grain Council released their Grain Market Report.

The output forecast for global total grains (wheat and coarse grains) has been revised 5m t higher this month to 1,946m, including increases for wheat, corn and other coarse grains. While some of the output increase is set to be absorbed by higher use, a substantial surplus is expected and end-season stocks are seen up by 41m t y/y at a four-year high. The total grains world trade forecast has also been raised to 277m t, a 10m increase from last year.

• Crop concerns in some areas and the US showing signs of slowing export demand are leading to weakness in world wheat prices.
• Corn quotes remain close to three-year lows, as firmer export prices in the US and Brazil were outweighed by slight falls in Argentina and the Black Sea.
• Rice trends were mixed across origins, with prices in Thailand easing, but some renewed strength in Vietnam on prospects for fresh sales to the Philippines.
• Soybean markets benefited from firm export demand, more than offsetting pressure from bearish crop outlooks in major exporters.

Corn trade is expected to surge by 10%, with China’s projected imports particularly strong at 7m t (3.7m last year), but, with competitive prices, purchases are also likely to rise elsewhere, notably in Mexico where it is displacing sorghum.

The global rice output forecast is 3m t lower in this report, but would still be a record, and supplies are set to remain ample, especially in the major exporters.

Global soybean 2013/14 output is projected up 5%, at 285m t, with end-season stocks expected to rebound by 13%, boosted by improved availabilities in the major exporters. As buying interest from China strengthens, world trade is forecast to expand by 10%.

Looking to 2014/15, winter wheat planting is nearly complete in the northern hemisphere, and the global wheat harvested area is projected to expand by 1.4%, to about 223m ha. The condition of the US crop appears to be much improved compared to last year.

In other news, on Sunday the UK restrictions on some crop protection products began. The UK was one of the 8 EU member states that voted against the ban.

The HGCA has warned that the ban on neonicotinoid seed treatments could cost UK growers at least £72m a year due to a lack of control of two key crop pests – cabbage stem flea beetle and aphid-spread turnips yellow virus.

The UK NFU has described the lack of an EU impact assessment to determine the effect on pollinators and crop production as ‘alarming’. The NFU believes that the decision to restrict the use of neonicotinoids is not justified by the available scientific evidence and could have serious consequences for farmers’ ability to grow produce sustainably.

A Defra spokesperson said: "We want to see a healthy bee population, but we did not support the EU proposal because the scientific evidence doesn't support it, and restrictions will hit farmers' productivity.”

To read the entire International Grain Council report, click here.

Have a great week!
Sarah