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Global wheat production to fall in 2016/17qrcode

Jun. 14, 2016

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Jun. 14, 2016
The International Grains Council updated its 2016/17 wheat production estimates and provided a look at what marketing year 2016/17 may have in store. Due to reduced planted area, IGC pegged 2016/17 U.S. wheat production at 52.8 million metric tons, down 5 percent from 2015/16. As of May 1, USDA reported 61 percent of U.S. winter wheat is in good to excellent condition compared to 42 percent at the same time last year. USDA rated 7 percent of winter wheat in poor condition, compared to 20 percent in 2015, and estimated that 42 percent of winter wheat had headed, compared to the 5-year average of 34 percent. U.S. spring planting is 54 percent complete. That is behind last year’s pace but ahead of the 5-year average of 39 percent. USDA pegs spring wheat emergence at 22 percent compared to the 5-year average of 14 percent.
 
Canadians are also planting spring wheat into generally adequate soil moisture, though dry conditions are developing along Canada’s southern border. According to a StatsCan survey, Canadian farmers intend to plant 6 percent less spring wheat this year due to increased competition from durum, pulses and oilseeds. StatsCan estimates spring wheat area at 6.50 million hectares (16.0 million acres) and expects total planted area to fall 1 percent year over year to 9.64 million hectares (23.8 million acres). This includes 2.48 million hectares (6.12 million acres) of durum, a 5 percent increase from last year spurred by high durum prices and low stocks. According to Agriculture and Agri-Food Canada, its 2016/17 winter wheat area, especially soft red winter wheat in Ontario, returned to average levels. Winter wheat area for 2016 is 681,000 hectares (1.68 million acres), or 7 percent of the total estimated wheat area. Despite the lower planted area, IGC predicted total 2016/17 Canadian wheat production would reach 29.5 MMT, up from 27.6 MMT last year.
 
European Union (EU) farmers also planted slightly less wheat for 2016. Strategie Grains estimated EU soft wheat planted area at 24.0 million hectares (59.3 million acres) compared to 24.1 million hectares (59.5 million acres) in 2015. According to IGC, winter wheat field conditions in the EU’s three largest wheat-producing countries—France, Germany and the United Kingdom—are “particularly good.” However, uncertainty about Poland’s winter wheat persists after dry sowing conditions slowed plant development and left the wheat vulnerable to a December freeze. Strategie Grains estimated winterkill damaged 7 to 10 percent of Polish winter wheat and pegged its 2016/17 winter wheat production at 10.6 MMT, down 3 percent from 2015/16. IGC expects EU wheat production to dip to 152 MMT, down 7 percent from last year’s record but still well above the 5-year average.
 
IGC also expects Black Sea (Kazakhstan, Russia and Ukraine) wheat production to decline to 94.0 MMT, down 8 percent year over year. UkrAgroConsult expects Ukraine will show the largest decrease because dry conditions last fall cut planted area by 12 percent year over year. Winter wheat accounts for 95 percent of Ukrainian wheat production and recent rain improved crop conditions there. The same rainfall and favorable temperatures also benefited Kazak and Russian winter wheat, which UkrAgroConsult noted is in generally good condition.
 
Winter wheat planting only recently began in the Southern Hemisphere. According to ABARES, Australia received beneficial moisture last week, which improved soil conditions across major wheat producing areas. IGC expects Australian wheat production to reach 25.0 MMT, up from 24.2 MMT in 2015.
 
In Argentina, heavy rains delayed soybean harvest but provided beneficial moisture across the country. IGC expects Argentine planted area to increase to a 9-year high of 5.2 million hectares (12.8 million acres). IGC forecasts Argentine wheat production will jump to 14.6 MMT, up 30 percent from 2015 due to the Macri government’s more favorable farm policies.
 
Overall, IGC expects global wheat production to fall from a record 734 MMT set in 2015/16 to 717 MMT, which would be the third highest on record and on par with 2013/14 production.
 

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