Early crop outlook for 2021
Although this season has just kicked off, the Food and Agriculture Organization of the United Nations (FAO) predicts that global cereal production will increase for the third consecutive year in 2021. Some countries in the northern hemisphere have begun to harvest winter wheat. The current crop conditions indicate that the outlook is slightly better than previously expected. Therefore, the preliminary forecast for global wheat production in 2021 has been raised to 785 million tons. The European Union (EU) production in 2021 is expected to increase significantly to 137 million tons. The reason is that while the wheat planting area increases, the favorable conditions for winter crops in the early spring will support the yield expected to be higher than last year’s low level and the five-year average. The situation in the United Kingdom is similar, with excessively humid winters and dry, warm weather in late February and March favouring the growth of wheat, and its output is expected to reach 14 million tons. Although the rainfall in Russia has improved, which partially alleviated the lack of water in the early season, due to the lack of sufficient snow, the cold wave in February may cause the freezing injury rate in the southern wheat production area to be higher than normal. Coupled with the decline in the planting area, Russia’s estimated output in 2021 is therefore reduced to 79 million tons. The outlook for Ukraine is positive, with official data showing that its wheat production will increase to 27.5 million tons, which is above average. Official data from the United States show that its winter wheat sown area has increased moderately compared to the initial estimate. This increase is expected to be enough to offset the decrease in spring planting. It is estimated that the total wheat planting area can increase by 5%year-on-year, but it is still the fourth smallest area on record. It is estimated that the wheat production in the United States will slightly increase to about 52 million tons in 2021. Due to poor weather, the yield outlook is suppressed. The increase is mainly based on the expansion of the planting area. In Asia, Pakistan’s sown area is above average, which supports the forecast of wheat production that will reach at least the official target of 27 million tons. India’s prospects are also positive, with officials predicting that its wheat production will reach a record 109 million tons. The latest field evaluation report shows that China’s planting conditions are average and the soil moisture status is good. China’s output in 2021 is set at 135.5 million tons, which is almost the same year-on-year. Production prospects for several countries in the Near East continue to be bearish due to abnormal dryness.
Countries in the southern hemisphere have begun to harvest the 2021 coarse grain crops, and prospects continue to show that production will be higher than normal. In South America, Argentina’s corn production is expected to reach an above-average level of 58 million tons in 2021, mainly due to its near-record sown area. Favorable price prospects are expected to drive the expansion of Brazil’s 2021 main season crop planting area, so its total corn output is predicted to be a record 108 million tons. In southern Africa, the weather conditions in South Africa, the region’s main corn producer, continue to be favorable. Yields may reach multi-year highs. Together with the expansion of planting area, it is expected that the total output in 2021 will be pushed up to 17 million tons, close to the highest level in history. In the northern hemisphere, the planting of maize for 2021 has also recently begun. The world’s largest corn producer, the United States, released the “Expected Seeding” report in March. Its preliminary estimates indicate that the country’s corn planting area may increase by 1%this year. Given strong demand and good price prospects, this increase has not reached the market. expected.
2020/21 Grain Market
This month, FAO slightly raised its forecast for world cereal production in 2020 to 2.765 billion tons. The current forecast is an increase of 2%over the previous year. This month’s increase mainly reflects the increase in India’s estimated production. Its official data shows that corn yield will be higher than previously expected, while Russia’s contribution to the increase is relatively small. The forecast of world rice production has also increased slightly, which mainly reflects that Thailand has reduced its forecast for low-season production, while the production of other countries has slightly increased.
The forecast for global cereal consumption for 2020/21 has been revised up to 2.777 billion tons, an increase of 11 million tons from the previous report and an increase of 2.4%from the level of 2019/20. This month’s adjustment is mainly due to an increase of 8.4 million tons of world wheat consumption in 2020/21 to 763 million tons, an increase of 1.7%from 2019/20. The monthly increase reflects strong demand. Among them, the recovery of China’s livestock industry from the African swine fever epidemic coincided with the high domestic corn price, which pushed up the expected use of wheat feed. Also affected by the expected increase in China’s barley feed consumption, the forecast for global coarse grain consumption for 2020/21 this month has been revised up by 2.9 million tons to 1.5 billion tons, an increase of 2.9%from 2019/20. It is estimated that the global rice consumption in 2020/21 will hit a record high of 514 million tons, which is basically the same as the forecast in March and 1.9%higher than the forecast of the previous season.
Global cereal stocks at the end of 2021 are expected to fall by 1.7%from the beginning level to 808 million tons, a decrease of 3.3 million tons from last month’s forecast. The reduction in inventories and the increase in consumption have combined to reduce the ratio of global cereal stocks to consumption from 29.6%in 2019/20 to 28.4%in 2020/21, the lowest level in seven years. The prospect of growth in feed consumption has reduced expectations for an increase in China’s wheat stocks. As a result, the forecast for global wheat stocks has been lowered by 8 million tons from last month to 284 million tons, but it is still 2.8%higher than the initial level. In contrast, driven by the increase in corn stocks in India and the United States, global coarse grain stocks are forecast at 341 million tons, an increase of 4.5 million tons month-on-month. However, the forecast of global coarse grains stocks is still 5.9%lower than the initial level, which is mainly due to the reduction of 23 million tons of corn stocks, and most of the reductions are concentrated in China and the United States. As for rice, the increase in inventories in Nepal, Thailand and Saudi Arabia is expected to exceed the decrease in Bangladesh. Therefore, the forecast of world rice stocks at the end of 2020/21 is 183 million tons, which is slightly different from last month’s forecast and the beginning of the period.
FAO’s forecast of world grain trade for 2020/21 has been revised up slightly from the previous month to 466 million tons, an increase of 5.8%from 2019/20. Demand from China and Nigeria exceeded expectations, driving the 2020/21 (July/June) world wheat trade volume to increase by 1.4 million tons from the previous month to 188 million tons, an increase of 2.0%from the previous quarter’s level. The total trade volume of coarse grains in 2020/21 (July/June) is forecast to be 230 million tons, which is almost the same as in March. It is expected to increase by 9.0%from 2019/20 due to the unprecedented level of corn purchases in China. Although the import prospects of some Asian countries in the Near East are worse than the March forecast, the world rice trade volume in 2021 (January to December) is expected to remain at the level of around 48 million tons. This year’s increase of 6%reflects the expected increase in procurement in all regions except Europe and the Americas.