Chinese farmers poised for bumper crop

Record harvest | Large haul means Canada and the U.S. will see a decline in grain export business to China

A country that provided major support to wheat prices in 2013-14 won’t be nearly as big an influence in the coming crop year, according to two analysts.

China is sitting on a bumper crop one year after harvest rains ruined the quality of its 2013 wheat, forcing it to become a major importer of the grain.

Paulette Sandene, Chinese crop analyst for the U.S. Department of Agriculture, said this year’s harvest is going much better.

“So far the prospects are very good,” she said.

Harvest will wrap up by the end of June and if conditions remain favourable it should be an outstanding crop.

“It will be equal to or exceeding the record, which was set long, long ago when they had a lot more planted area,” said Sandene.

The USDA forecasts China will import seven million tonnes of wheat in 2013-14, making it the world’s fourth biggest buyer of the crop behind Egypt, Brazil and Indonesia.

It estimates China will import three million tonnes next crop year, which is the same amount purchased in 2012-13.

Bruce Burnett, CWB weather and crop specialist, agreed that it has been a good growing season in China based on what he has seen from the weather maps.

“That should certainly lessen the need for them to import,” he said.

China purchased 712,284 tonnes of Canadian wheat through the first eight months of 2013-14. That is about the same amount it imported through all of 2012-13 and more than double what China bought in 2011-12.

But the biggest beneficiary of China’s demand was U.S. soft red winter wheat, with China expected to buy more than three million tonnes in the current crop year.

Burnett said that had a major influence on world wheat prices.

“It’s going to be interesting this year to see how it plays out,” he said.

It appears there will be a “very healthy” world wheat crop this year despite the drought troubles with the U.S. hard red winter wheat crop, he said.

“With the drop off in demand from a place like China, it’s probably very significant in terms of where is the wheat demand is going to come from this year,” said Burnett.

Sandene said China’s crop got off to a good start last fall with plenty of rain. The winter was mild with some good snow in February. March was warm and April was rainy.

There have been no pest or disease epidemics and harvest conditions are vastly improved.

“This year, even though there has been some rain, the farmers are working around it pretty effectively,” she said.

Preliminary estimates from some of the winter wheat growing provinces indicate record yields. The government will release its first official estimate of the grain crop in early July.

Sandene agreed that the record wheat crop will reduce the need for imports, although there are other factors to consider.

“They import for reasons beyond shortage of grain. They do it for political reasons and price reasons so it’s really hard to predict,” she said.

The government purchase price for wheat is a little higher than it was last year, so if the world wheat price is low the government may decide to import some cheaper wheat. Or, if farmers receive untimely June rains, there could still be quality damage.

Sandene said China’s rapeseed crop has already been harvested. They had good winter weather in the rapeseed growing area but excessive rainfall in the spring caused some waterlogging.

“I don’t think it was a spectacular crop but I don’t think it was damaged in any particular way. I think it was an average year,” she said.

The corn crop is off to a good start in northeast China and acreage is up.

“(The government) has been releasing a lot of corn out of their local stocks, so I think there’s a real good supply of corn out there,” said Sandene.

Soybean area is down and seeding has been delayed due to a cold and wet May in the soybean growing area, which is further north than where the corn is planted.

“I saw one report that said it might be a week or 10 days slower than average but they can make that up pretty quickly with warmer weather in June, so I’m not too concerned about the crop calendar at this point,” she said.

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