Global Wheat 2012/13 Production Larger
Global wheat production for 2012/13 is forecast up 3.7 million tons this month to 655.1 million. Chinese wheat production is up 2.6 million tons to 120.6 million, as that country’s National Bureau of Statistics (NBS) recently issued its first grain production estimates for 2012 by crop, which, though very much in line with its July estimates for total summer grains, indicated slightly lower area harvested, but higher yields. With wheat area roughly stable, wheat yields in China have been steadily increasing over the last 10 years (though a small drop in yields occurred in 2009/10).
Australian wheat production is projected 1.0 million tons higher at 22.0 million. On December 4, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) issued a new forecast stating that “crops have held up better than expected in many winter cropping regions, given the dry conditions experienced in the past few months.” The main reason for higher than expected wheat yields is apparently still abundant sub-soil moisture reserves in the eastern provinces of Queensland, New South Wales, and parts of Victoria and South Australia. In Western Australia, sub-soil moisture levels are low, but still better than top-soil levels. Canada’s 2012/13 wheat production is increased 0.5 million tons to 27.2 million this month. The increase is based on a Statistics Canada survey (over 29,000 farmers, from October 26 to November 14), that indicated that favorable harvest weather and lower abandonment resulted in higher than expected harvested area (especially in Saskatchewan and Manitoba, up 18 and 27 percent on the year, respectively) and in larger wheat output.
Wheat production in Brazil is down 0.2 million tons to 4.8 million. Though conditions in Parana, which produces about half of Brazilian wheat, are reported to be good, another major wheat-producing state of Rio Grande de Sul (about a 30- percent share in wheat output) suffered adverse weather conditions in some parts of the state. Frost, hail, and unusually high-intensity rainfall coincided with wheat filling and maturing, while especially heavy precipitation (the latest being on December 5) affected harvesting, causing additional lodging.
A revision of the wheat data series for North Korea this month is based on a special report by the United Nations’ Food and Agriculture Organization and the World Food Program (FAO/WFP). The mission in October 2012 was allowed and supported by the North Korean Government. The mission was permitted to visit various parts of the country, and was given access to official crop data and other relevant information. Though the changes are small in absolute terms (for 2010/11 down 0.03 million tons to 0.2 million, for 2011/12 down 0.05 million tons to 0.15 million, and for 2012/13 down 0.1 million tons to 0.1 million), current data better reflect reality, showing much lower yields in the years with adverse weather conditions, such as 2011/12 and 2012/13.
Small adjustments are made for EU-27 (with a slightly lower wheat output in France), Mongolia, and Jordan.For 2011/12, global production is raised 0.4 million tons, based on an upward revision for Australia (0.4 million tons) as recently reported by the Australian Bureau of Statistics. Production for Canada is revised slightly higher based on the latest data from Statistics Canada.
Lower 2012/13 Beginning Stocks Partly Offset Production Increase
The 3.7-million-ton increase in global production prospects this month is partly offset by a 2.1-million-ton reduction in 2012/13 beginning stocks. Increased 2011/12 wheat feed use for China raises 2011/12 ending stocks and 2012/13 beginning stocks 2.0 million tons this month. Higher 2012/13 beginning stocks are projected for Australia, up 0.4 million tons on larger 2011/12 production, for Russia, up 0.5 million tons as a result of an upward revision of 2011/12 imports, and for South Africa, up 0.2 million tons with lower domestic consumption. These increases are more than offset by the reductions for Paraguay (down 0.4 million tons), Kazakhstan (down 0.3 million tons), Argentina (down 0.2 million tons), EU- 27 (down 0.1 million tons), and several other smaller changes, reflecting 2011/12 trade revisions.
Wheat Consumption Down Slightly for 2012/13
A small 1.2-million-ton decrease is projected for global wheat use for 2012/13, with marginal changes for both feed and food use this month, as sizeable shifts in feed use for a number of countries are mostly offsetting. Wheat feed use is projected higher for China for two consecutive years, up 2.0 and 1.0 million tons for 2011/12 and 2012/13, respectively. Increased Chinese feeding is better correlated with the high growth rates in its compound feed-production industry, and is a reflection of the domestic relative prices that are about 10 percent lower for wheat compared to corn. While increased from the previous forecast, China’s 2012/13 wheat feeding is expected to decline compared to the previous year due to abundant corn supplies.
Wheat feeding in Canada is increased 0.5 million tons to 3.7 million this month, which is still almost 1.0 million tons lower than last year when an abundance of low-quality wheat encouraged higher feeding. This year’s wheat quality is good, and this month’s increase in feeding reflects expectations of a less significant decline in Canadian livestock numbers, than previously expected. Wheat feed use is also projected up 0.5 million tons to 1.0 million in Iran, following its expanding imports of wheat for food use while feeding its domestically produced low-quality wheat. Smaller upward revisions of feed use are made for Brazil and South Africa.
EU-27 wheat feed use projected for 2012/13 is further reduced by 1.5 million tons. Corn imports and coarse grain feeding are projected higher, more than offsetting the wheat feeding reduction, as relative prices continue to favor corn over wheat for feeding. Australian feed use is revised down for three years in a row: for 2010/11, down 0.5 million tons, and for 2011/12 and 2012/13 down 0.3 million tons, each. The changes are in line with ABARES estimates, and better reflect the pace of livestock developments and residual use. Projected feed use is also trimmed for Paraguay.
Click here to see more...