Week Beginning 14th May 2018
Posted by Anderson Grain Marketing on Nov 6, 2018 in AGM News | 0 comments
The latest USDA report looks to be setting a bullish tone for the 2018/19 markets. However, had little impact on the wheat market.
The USDA report showed, global wheat production for 2018/19 is projected at 747.8 million tonnes (this is down 10.6 million on the previous year’s record). The year-over-year production decline stems from a 13.0-million-tonnes reduction for Russia. With the world population increasing every year and rising food demand. Global wheat consumption is projected at a record 753.9 million tonnes. Over in the US wheat production for 2018/19 is forecasted at 50 million tonnes due to the increase area of spring wheat being planted to offset reduced winter wheat output.
Forecast for corn production is up year-on-year the largest contributors being; China, Brazil, Argentina, Ukraine and Russia. The US corn exports are forecast to decline 125 million bushels in 2018/19, this may be a reflection on the spring wheat cropping that got sown just in time. However reduced exports out of Argentina and Brazil during 2017/18 are expected to boost US exports during the first half of 2018/19.
Global weather is continuing to be a strong driver of the markets. Argentina has had both ends of extreme weather and crops have suffered immensely. A well-documented drought left a year-on-year reduction of 8 million tonnes on their maize crop, as well as a 17.8 million tonne reduction on soybean forecast (2017/18). Recent heavy rainfall in Argentina as had an impact on the soybean harvest and could result in further yield reductions.
A wet March for Russia has now turned into a dryer April/ May for parts of the country. According to AHDB if lack of rainfall continues then crop development and therefore yields could be affected.
The ongoing lack of rainfall in the US has not helped US farmers with their decisions of cropping. However recent reports have suggested the relief of rain has allowed spring wheat crop to be drilled.
In recent news, Agriculture and Horticulture Development Board (AHDB) has recently started looking into the possibilities and opportunities for exporting UK wheat to Cuba.
Cuba currently is the largest importer of wheat in the Caribbean (annual imports totalling 0.8Mt), due to the unsuitable growing conditions for wheat. Tourism is a key driver for Cuba’s high-volume imports and with the country’s continuing popularity, beer and bread consumption is expected to increase. In a post-Brexit environment, the potential trade opportunities with non-EU countries are important to explore for the agriculture industry.