IGC: Global wheat crop developing nicely
Delegates at the International Grains Council’s Grains (IGC) Conference in London heard largely positive news on wheat crop development, and about the successes of United States (US) soybean exporters.
Experts at the IGC event, held June 10-11, talked about the potential for pulses and the importance of biofuels to the maize (corn) sector as well as the potential disaster looming in that sector in the United Kingdom (UK).
Isabelle Tranter, meteorologist, Aura Commodities Ltd., discussed crop conditions during a workshop on wheat, starting with Europe after a wet season in 2024.
“This year it’s been entirely different,” Tranter said. “We’ve had lots of dry weather, and we’ve managed to get more acreage in the ground across some of these key areas in France, Germany and the UK. We’re also generally expecting much better yields across Europe.
“There are still some areas that we’re perhaps a little bit concerned about. France has continued to miss out on rain. We’ve had temperature fluctuations across Poland, but all in all it’s looking quite positive, and especially across some of the southern European countries.”
She added that countries like Spain and Romania “have had really favorable conditions this year, so for Europe as a whole we’re actually looking at quite a big increase in production, to around 15 million tonnes for soft wheat, so that makes us up to about 140 million tonnes this year.”
Ukraine and Russia have continued to have acreage issues, she said.
“But all in all, we’ve had a much better spring,” Tranter said. “Rainfall has been almost double that of last year in southern Russia, and generally the outlook is much more optimistic. However, we’re still not looking at big increases across both these countries.”
A projected small increase in Russian wheat output and a small decline in Ukrainian production meant that they’re likely to combine for production that is similar to last year, she said.
Tranter then turned her attention to the United States where the winter wheat crop is currently being harvested.
“There were lots of concerns to begin with,” she said. “We had La Niña conditions, which typically can be associated with some dryness. Now actually we’re looking at that production increasing this year as well, maybe by an extra million tonnes or so.”
She said several regions are dealing with production issues, including China.
“They’ve actually had a lot of hot and dry weather that affected some of the key provinces like Henan, which is about 30% of the wheat area in China, so we actually think that we have lost some wheat,” she said, putting the likely Chinese wheat crop at around 138 million tonnes this year, which is about 4 million tonnes lower than the current US Department of Agriculture (USDA) forecast.
In the United States and Canada, she said planting “has gone really well because it’s been really warm and it’s also been very dry, but that has started to raise some concerns that moisture levels have started to fall again.”
“There is a bit of a risk across the US this year that we could see some form of high pressure developing, which could lead to hot and dry weather impacting some of those spring wheat areas, specifically in the Pacific Northwest and Montana,” she said.
Rosalind R. Leeck, managing director and Northeast Asia regional director, US Soybean Export Council, said during a workshop on soybeans that China is obviously the largest market in the world by far, importing more than 100 million tonnes each year.
“For the US soy industry, beginning after the last trade war in 2017, we saw our share drop,” she said. “That has never recovered fully but we still export around 40% of our total soy exports to China. We do have market diversification that has increased as a result of the last trade war and we have focused very intently on trying to diversify markets.
“So when you look at China, though we aren’t necessarily trying to increase our market share there, we want to participate in any kind of growth that happens. When you look at the rest of the world, it’s really a great growth story despite some of the challenges that the global economy faces.”
She said that while overall growth in Europe is stable, the United States continues to see its market share increase slightly there.
“We are fully committed to the European market, the second largest in the world,” she said.
She said the EU’s deforestation regulations might give the United States an opportunity to increase its share in the EU for both soybeans and soybean meal.
“North Africa has also been a tremendous growth market for US, especially on soybeans,” she said. “Egypt is a great success story. We’ve seen just tremendous growth there over the last decade. Southeast Asia is also a great growth market, particularly for meal. Mexico has also continued to show good strength and given that we share a land border with Mexico, we have in excess of 95% market share. That growth really does come directly to the United States.
“Colombia is a tremendous market for us, as is Venezuela which has been a very strong importer of US soy, this year in particular. There’s plenty of growth. We continue to see growth in productivity from the US.”
Stephen P. Nicholson, executive vice president, Global Sector Strategist-Grain & Oilseeds/Farm Inputs, Rabobank, noted that “China demographers will tell you that China will have half the number of people by 2050,” adding that the thought of that “put a shiver down my spine.”
On biofuels in the United States, he thought that “it’s going to stay there because it’s already in place.”
“In this administration, there just won’t be any tailwind behind biofields,” he said. “They’re not going to kill them because that’s a constituency that voted in the president.”
In a workshop on pulses, Sudhakar Tomar, president, India Middle East Agri Alliance (IMEAA), noted that “pulses have been grown for a very long time and only now people have started (viewing) pulses as the superhero of the common people.”
“In the 1980s, pulse production was about 50 million to 55 million (tonnes),” he said. “Fast forward to 2023, and we are sitting at about 95 million to 100 million, so there has been doubling of the production.”
Filippo Roda, senior market analyst and markets manager, Areté – The Agri-food Intelligence Company, said the EU has a big deficit in pulses, which is getting larger.
“This is true even if we take soybeans out of the picture,” Tomar said. “In the last 10 years, the average gap between European pulses consumption and production has been around 1 million tonnes. Despite growing production, consumption is growing faster. The deficit is getting larger, and European Union self-sufficiency is not improving.”
Milan Shah, board member, Global Pulses Confederation, explained that demand growth is going to be in western markets such as the EU, as well as in emerging economies that are facing a big demographic shift in urbanization such as India, he said.
“We need international trade to move products from surplus to deficit,” he said. “We’ve got to keep making sure that we get as free and open international trade as we can.”
In a workshop on maize, with the emphasis on ethanol, Doug Berven, vice president of corporate affairs, POET, the largest biofuel producer in the world, stressed that “the trends in the US are obviously growth — growth with E15, maritime, sustainable aviation fuel, trade.”
“We like to say we can make anything out of a bushel of corn that the oil industry can make out of a barrel of oil,” he said, emphasizing the sector’s importance to US farmers.
David Carpintero, director general, ePURE – European renewable ethanol, said there are 55 refineries scattered around Europe that play an important role in local economies.
“They are normally located in rural areas, and they create employment,” he said, noting that the jobs created were highly skilled. “They are growing in terms of the outputs they produce, but also in their contributions to local economies.”
In response to a question from World Grain, Carpintero said “we are extremely worried” about the UK’s trade deal with the United States, reached in early May, in which the British have agreed to cut their 19% tariff on US ethanol to zero for a 1.4-billion-liter quota, which is equivalent to the entire British production.
“That’s going to put the UK ethanol producers out of businesses,” he said. “They are going to close full stop. Does the UK want that?”
He stressed the strategic importance of ethanol and its byproducts including protein feed.
“I understand there are some discussions going on with the office of the Prime Minister and I think they need to think of ways to increase the market,” he said.
For almost 30 years of expertise in the agri markets, UkrAgroConsult has accumulated an extensive database, which became the basis of the platform AgriSupp.
It is a multi-functional online platform with market intelligence for grains and oilseeds that enables to get access to daily operational information on the Black Sea & Danube markets, analytical reports, historical data.
You are welcome to get a 7-day free demo access!!!
Tags: crop, dry weather, pulses, output, International Grains Council, rain, corn, United States, soybeans, wheat, soybean meal
