HROC (agency) - Kubota
Farminguk
27 August 2016 | Online since 2003
OvoConcept


15 October 2012 09:30:42 |

Australia wheat crop shrinks; UK grain lost export markets


The commodities price spike, the reluctance of some supermarkets to cover the production costs of food, and the bad UK wheat (see CR w/e 17th Aug) with all its associated contractual and milling problems makes this an extremely challenging year.
The quality issues mean that the UK grain trade has lost some of its export markets this year, so trade with feed compounders is almost the only game in town. Arable farmers are trying to find uses for sub-65 bushel wheat – apparently Drax and the bio fuel plants are not as choosy as chickens, and some low bushel wheat is being exported to the Mediterranean to blend and bulk out their feed wheat.
In the US, bioethanol production has fallen to its lowest level since reports began in 2010, with daily production at 10% below the same time last year. Bioethanol producers are losing $0.15-0.25 per gallon, so the industry has mothballed the equivalent of 600-700m gallons per year.
Globally the situation is tight for cereals: as we understand it, the wheat supply and demand is 659-681 = -22mt; barley is 133-135 = -3mt; and maize is 841-857 = -16mt. In other words we will be dipping into old crop carry-in stocks to keep the world fed. However India and China hold about 50% of global grain stocks, so though India may sell 5mt, China will not export any. We need to achieve a series of good harvests to replenish cereal stocks; otherwise prices will stay high indefinitely. Thus the focus is on Australia and the South American crops.
Unfortunately Australia’s wheat crop is shrinking; last year they exported 25mt, and according to the Commonwealth Bank of Australia that might fall to 17.8mt this year, as production falls to 21.4mt (29.5mt last year), which is 6% below the five year average of 22.8mt.
The EU is estimated to import 10mt maize this year, and after excluding contentious GM origins, the Ukraine is cheapest source – but it only has 12.5mt available. Meanwhile the lack of joined-up thinking anywhere in the EU, means that France is currently exporting maize to Japan and Asia. Extrapolating from Brazilian maize plantings, the analyst Celeres estimates next year’s maize crop at a record 76mt (USDA believe 70mt). Another analyst estimates 68mt, citing reduced seed and fertilizer sales by 10-15%.
Russia’s harvest is almost complete, and their grain harvest is put at 70mt (94mt last year). Russia’s export prices are no longer competitive to the tune of $15-20/t.
Russia is expected to export 10mt of grain this year. Kazakhstan's grain harvest this year is put at 14.2mt (30mt last year) from its entire 15.2m hectares, so yields are less than 1t/ha! (UK 6.75 this year, avg since 2000: 7.78) The Ukraine is expected to harvest 43mt of grain (57mt last year).
Because of the high level of winterkill, many farmers took the decision to replant with spring wheat; unfortunately the drought meant that this crop too was a failure. Consequently many Ukrainian farmers are broke, bank interest rates are in the region of 25%, so the ability of Ukraine to recover to its former export status is questionable. It rather depends on the financial situation of the bigger corporations who now run agriculture in the Ukraine, rather than the family farms.

In the US the soya harvest is 58% complete, with a good to excellent rating of 37%. The maize harvest is 70% complete. Soya bean and maize prices are about $15.50/b and $7.40/b respectively, which have been declining from their recent tops of $17.8/b and $8.4/b respectively.
AO soya is about £400/t delivered to the mill, but it is difficult to calculate the real price for Non GM soya, one importer places it at £100 over GM due to not having any to sell, whilst another has completely withdrawn – will we have supplies of Non GM to see us through the winter – we doubt it! Wheat is about £200/t for November.
Soya planting has just started in Brazil, but more rain is needed to achieve the potential crop of 82mt. Argentina believes that there will be a switch from planting maize to soya. As of Sep 27th, there is no sign of soya rationing as US export sales commitments are 862mb (618mb last year) almost 40% more than last year, whereas the USDA believes that exports for the entire year will be 22% below last year. Brazilian soya bean exports are drying up fast, so demand is switching to the US.

Download

0 Comment

loginuserlogo
Name

Please enter your name


Email

Please enter your email

Please enter valid email


Comment

Please enter your comment


Post Comment

Your comment has been submitted successfully. Please wait for admin approval.


Comments

No comments posted yet. Be the first to post a comment


Canada | 26 August 2016
Canadian beef exports to EU in limbo over E. coli dispute

If differences of opinion over food safety practices are not resolved, the big promises of a new European market for Canadian beef may be a pipe dream. The Comprehensive Economic and Trade Agreemen...


India | 26 August 2016
GM mustard clears hurdle in India but more remain

A government panel has cleared commercial use of what would be India's first genetically modified (GM) food crop, but politicians still have to give final approvals amid wide-spread public opposition....


USA | 26 August 2016
USDA buys $20 million in cheese from dairy farms

Moving to bolster dairy farmers who are struggling to cope with price declines, the Agriculture Department announced Tuesday it is spending $20 million - on 11 million pounds of cheese. A taxpayer ...


France | 26 August 2016
Lactalis talks with French milk producers end with no deal

A meeting between Europe's largest dairy group Lactalis and French milk producers requesting a rise in prices ended in a deadlock after 10 hours of negotiations, sources close to the talks said. ...


USA | 26 August 2016
California farmers turn to sewers for water

California's prolonged drought is forcing Central Valley farmers to scramble for water to irrigate crops. They have to be creative. One agency is even turning to a sewage plant to meet demand. Just...



Trending Now

Viewed
Discussed


Top stories you may have missed
FarmingUK
FarmingUK Logo

FarmingUK

The British public are overwhelmingly in favour of keeping or strengthening...


FarmingUK
FarmingUK Logo

FarmingUK

The sustained recovery of pig prices since the spring has come at a time wh...


FarmingUK
FarmingUK Logo

FarmingUK

A World Trade Organisation (WTO) panel has declared the Russian import ban ...


FarmingUK
FarmingUK Logo

FarmingUK

A new study has linked oilseed rape crops grown from neonicotinoid-treated ...


FarmingUK
FarmingUK Logo

FarmingUK

Philip Hammond is to guarantee billions of pounds of UK government investme...


FarmingUK
FarmingUK Logo

FarmingUK

Access to the foreign labour market is 'critical', according the chief exec...


FarmingUK
FarmingUK Logo

FarmingUK

The Tenant Farmers Association has said the National Trust's vision for a p...


FarmingUK
FarmingUK Logo

FarmingUK

Ulster farmers will 'not lie down and wave the white flag' when Brexit nego...


FarmingUK
FarmingUK Logo

FarmingUK

The cost of rural crime to the UK economy costs £42.5 million a year, accor...


FarmingUK
FarmingUK Logo

FarmingUK

A young farmers club member from Oxfordshire has created a petition on the ...


closeicon
Username
Password