Farmers are heading into seeding season with generally good conditions.
The problem for prairie wheat growers is that this is true for farmers across most of the world, including key competitors. There are few signs that any of the world’s major wheat crops are or will be in serious trouble although market watchers are keeping an eye on China and Australia where dryness has been a problem.
Major forecasting bodies expect world wheat production to be good again, removing most of the hopes for higher prices.
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“World production is still going to be up there,” said Canadian Wheat Board weather and crop production analyst Bruce Burnett.
The International Grains Council recently projected a world wheat crop of 602 million tonnes, which though smaller than last year, is a “fairly healthy wheat crop.” Production in 2004 was 624 million tonnes, 12 percent higher than in 2003.
The IGC expects world wheat consumption to drop by six million tonnes to 605 million tonnes, mainly because of reduced livestock feed use.
It also expects human consumption to drop in China and India, although Chinese consumption is still expected to exceed production, drawing down stocks and drawing in foreign grain.
Ending wheat stocks of the five major exporters, Canada, United States, Australia, Argentina and European Union, will probably be 52 million tonnes, up two million from 2004-05.
Globally, the IGC forecasts ending stocks for 2005-06 at 133 million, down from 137 million in 2004-05.
Durum production is expected to be lower in the Mediterranean region this year, which should help Canadian farmers’ prospects for better prices. Italy has seeded fewer acres because of farm policy reform. Morocco has endured dry conditions, as have Portugal, Spain, Syria and Turkey.
IGC forecasts world durum production at 37.4 million tonnes compared to 41.1 million in 2004-05.
The IGC predicts world corn production will fall to 660 million tonnes, 48 million tonnes less than last year’s crop, even though acreage will be close to the same. The IGC doubts that last year’s remarkably high yields in countries such as the U.S. will recur.
Brazilian corn production has been hurt by dryness in the southern state of Rio Grande do Sul, but Argentine production was above average. Year end stocks are expected to fall by five million tonnes to 126 million.
Barley production should also fall, the IGC predicts, to 145 million tonnes from 152 million tonnes. Demand for feed barley won’t weaken and demand for malting barley, especially from Chinese buyers, should increase.
But the IGC doesn’t see barley stocks falling because world production is matching world consumption.
With big production prospects hanging over wheat and feed grain, emerging problems in Australia and China are getting a lot of attention.
The Chinese winter wheat crop has suffered from hot and dry conditions, reducing its potential. But the crop is well advanced and no one is predicting a crop failure.
Farmers in eastern Australia are worried because soil there is dry and seeding has been delayed as they wait for rain. Last week, Australian farm group leaders said they were worried that crops could be devastated by drought because sufficient rains for seeding had not arrived by April 25, a date Australian farmers consider a harbinger of the winter growing season. If there have not been good rains by then, drought has often followed.
In 2002, Australian wheat production collapsed to 10 million tonnes from 24 million tonnes in 2001.
