World wheat production for 2010/11 is projected to decline again this month by 15.3 million tons, following a 16.7-million-ton projected drop in foreign production that more than offset a 1.3-million-ton increase in U.S. wheat output. Foreign wheat production projected for 2010/11 is reduced this month to 584.1 million tons, 35.9 million tons below last year’s (2009/10) record of 620.0 million tons for foreign wheat output (world wheat output hit a historical high in 2008/09 at 683 million tons). Foreign wheat area is projected down slightly this month. Major reductions in production are made for three main FSU-12 wheat producers, Russia, Ukraine, and Kazakhstan, and for the EU-27. These reductions are partly offset by higher projected output in the U.S., Australia, India, and several other countries.
This month’s changes feature a dramatic 13.5-million-ton reduction in wheat production forecast collectively for Russia, Ukraine, and Kazakhstan, the three countries that together produce more than 85 percent of FSU-12 wheat. The biggest drop in 2010/11 wheat production of 8 million tons is forecast for Russia, where wheat output is lowered a third straight month to 45 million tons (last month wheat production in Russia was lowered by 4.5 million tons). This level of wheat production is 16.7 million tons lower than last year, 8.5 million tons lower than the last 5-year average, but 10.5 million tons higher than the annual average of 1996-2000. Current output is higher than during 1996- 2000 because of an increased share of higher yielding winter wheat in total wheat production, and also because of structural improvements in Russian agriculture. In Kazakhstan, wheat production is forecast 2.5 million tons lower this month, down to 11.5 million, which is 5.5 million tons lower than last year’s record crop and 2 .6 million tons lower than the 5-year average. This year’s wheat production also is more than 3 million tons higher than the 1996-2000 annual average, but this difference can be attributed mostly to an area increase, as the current projected yield is slightly lower than the 1996- 2000 average. In Ukraine, wheat production is projected down 3 million tons to 17 million.
In Russia and Kazakhstan, severe heat and drought in July and in the beginning of August continued to scorch much of the primary spring wheat areas in European Russia and stretching to western and northern Kazakhstan. Rainfall has been very light across the affected areas, many of which have had less than 50 percent of normal precipitation, and in some parts precipitation was less than 15 percent of normal. In many parts of the Volga and Central regions of Russia, temperatures damaging for wheat – higher than 35 degrees C (95 F) – have occurred for days on end, setting new records. The drought (worst on record) and relentless heat have caused an outbreak of wildfires throughout the region, exacerbating the damage. Although the Southern and North-Caucasus districts of Russia have also suffered from heat and drought, these conditions have not hurt the wheat crop much, because they hit after the wheat reached its mature stage of development. In these regions, wheat has been almost completely harvested, with yields higher than last year. Siberia has escaped the drought, and is expected to have a higher than average harvest. Despite Russia’s worst weather in decades, its 2010 grain output is close to the average from 1996-2000. The drop in Russian grain output therefore should not overly disrupt world markets, as the country will be returning to production levels achieved just 10-15 years ago and it has large wheat carry-in stocks.
In Kazakhstan, drought seems to have affected mostly western regions of the country that are not major contributors to the country’s wheat output. Important wheat growing areas in the north of the country, which produce 80 percent of the country’s wheat, were affected on a lesser scale.
Developments in Ukraine differ from the Russian and Kazakhstan prolonged drought story. Ukraine is situated between Russia in the east and the EU-27 (Poland) in the west. This year’s weather conditions in the European continent (from the UK in the west to the Ural mountains of Russia), have been rather peculiar, in that the excessive precipitation that has plagued eastern Europe and the drought in European Russia had a more or less permanent dividing line (a high pressure barrier) that passed through the middle of Ukraine. As a result, weather in Ukraine this year has been consistently divided by dryness in the east (in July and August excessive heat started to build up, with temperatures reaching 41 C (105 F)), and much higher than normal wetness in the west, with both extremes in weather conditions hurting crop development and harvesting. Wheat harvesting in Ukraine has almost been completed, and harvest reports as well as estimates by the Ukrainian Ministry of Agriculture point to wheat production at 17 million tons. Wheat output in Belarus is also forecast down 0.3 million tons this month, reflecting harvest reports.
The EU-27 wheat production forecast continues to fall for the third month in a row. Wheat production in the EU-27 for 2010/11 is projected down 4.3 million tons this month to 137.5 million, just 0.7 million tons down from last year. This month’s changes reflect further quantifying of the impact on crop yield potential of dryness in the western part of Europe that spread from the UK to Germany. Much of the northwestern part of Europe had less than 60 percent of the normal level of precipitation, with maximum temperatures in July reaching 35-36 C. The weather has cooled down in August, and some rain is being forecast for mid-August. Dryness in the northwest of the EU-27 led to rapidly depleting soil moisture levels in parts of Germany, France, Denmark, and Belgium-Luxemburg, where wheat production is down this month by 1.5, 0.5, 0.2, and 0.1 million tons, respectively. In the eastern part of the EU-27, where excessive wetness has been persistent since May, wheat crop yield estimates are also continuing to decree. Among East European countries, wheat production is down in Hungary, Romania, Bulgaria, Slovakia, and Estonia by 0.8, 0.7, 0.4, 0.1, and a 0.02 million tons, respectively. Wheat output is also decreased for Croatia by 0.3 million tons. In Brazil, wheat already has been planted, and production prospects are down 0.5 million
tons to 5.0 million this month following a 0.3-million-hectare area reduction. In Algeria, wheat already has been harvested, and output was adjusted down 0.5 million tons to 3.4 million. In Uruguay, wheat output is down 0.45 million tons this month to 1.1 million as a result of both area and yield reductions. Wheat planting in Uruguay has been finished, and yield potential appears to be in line with last year.
The substantial reduction in foreign wheat production is partly offset by an increase in production prospects in Australia, India, and several other countries. In Australia, wheat production is projected 1.0 million tons higher this month, reaching 23 million. The increase is based mainly on a wheat area rise. The eastern provinces of Australia have been enjoying warm weather and good precipitation favorable for planting this year.
Wheat planting is complete in North South Wales (NSW), Victoria, and South Australia, with some additional late planting in NSW. Wheat area is up 0.25 million hectares to 13.25 million this month, estimates that are supported by those issued by the Australian Bureau of Agricultural and Resource Economics (ABARE). In India, wheat production is up 1.7 million tons this month to 80.7 million based on the latest official estimates from the Government of India. Small upward adjustments are being made for Uzbekistan, Armenia, and Mongolia, also reflecting government reports.
Source : Wheat Outlook (ERS)