Wheat ending stocks for 2022/23 were lowered to 3.540 million tonnes by AAFC, from an estimated 3.980 million tonnes in June. The new crop wheat carryout was cut by 700,000 tonnes, to 5.100 million. Wheat production for 2023/24 was pegged at 35.331 million tonnes, down from 35.751 in June but still well above the 33.824 million tonnes grown in 2022/23. 

The oats carryout for 2023/24 was another notable adjustment, dropping to only 450,000 tonnes, from an estimated 1.000 million in June and the current marketing year target of 1.250 million tonnes. Total Canadian oats production was forecast at only 2.816 million tonnes in 2023/24, an 800,000 tonne drop from the June estimate and below the 5.226 million tonnes grown in 2022/23. 

Canola production for 2023/24 was raised to 18.800 million tonnes, from 18.400 million in June. However, ending stocks were left unchanged at the relatively tight levels of 650,000 tonnes for the current crop year and 600,000 tonnes in 2023/24.  

New crop production estimate for both peas and lentils were lowered from the June report as AAFC factored in Statistics Canada’s latest acreage estimates to 2.900 million and 2.100 million tonnes respectively. Pea ending stocks for 2023/24 are now forecast at 225,000 tonnes, from 375,000 in June and 400,000 the previous year. Lentil ending stocks are forecast at 125,000 tonnes, which would be down from the 200,000 tonnes projected in June but still up from the 100,000-tonne carryout anticipated for the current marketing year. 

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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In USDA’s Global Agricultural Information Network (GAIN) report released Wednesday, the attaché pegged the EU’s 2023-24 grain production at 284.7 million tonnes, 17.9 million more than this year’s crop which was hampered by drought.

Initial crop conditions were deemed favourable across the EU, according to the report, while also noting that rains will be needed to replenish soil moisture in Portugal, Spain and western France. Russia’s invasion of Ukraine and rising food prices caused “a stagnation of grain demand” but the larger production will reduce imports by eight million tonnes, to 27.4 million.

The total seeded area is slated to increase by 330,000 hectares to 51.4 million, while ending stocks in 2023-24 are projected to be 31.3 million tonnes, 1.5 million more than in 2022-23.

Wheat production in the EU is expected to rise 3.5 million tonnes to 137.8 million, largely in part due to higher production in France, Bulgaria, Hungary, Romania, Italy and Baltic nations.

Corn production will surge by 12.2 million tonnes to 64.4 million in 2023-24 despite a 170,000-hectare drop in area to 8.7 million. Barley production will also rise to 53 million tonnes in 2023-24 compared to the 51.5 million expected this year. Oat production will decline by 130,000 tonnes, to 7.5 million.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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In comparing the July report with that from June, the IGC tweaked its estimate for total global grain production for 2022-23. It trimmed output by 0.13 per cent at 2.252 billion tonnes, due to drought in the European Union. That reduction was also reflected in the world consumption, bringing it down to 2.277 billion tonnes. However, ending stocks were kept at 583 million tonnes.

The July numbers are markedly lower than those for the previous year. In 2021-22 total global grain production was pegged at 2.292 billion tonnes, with 2.238 billion in total consumption, which left ending stocks at 604 million.

Wheat was nudged up by one million tonnes, with the IGC bringing its July forecast to 770 million tonnes. That change also applied to total consumption at 780 million tonnes, with the carryout inching back by one million at 272 million.

Compared to a year ago, world wheat output was 774 million tonnes, with total consumption at 778 million and ending stocks at 279 million.

Corn saw slight changes from June’s report as well, with production easing down by one million tonnes at 1.189 billion. Total consumption was cut by two million tonnes at 1.202 billion, but the carryover remained firm at 271 million tonnes.

Last year, there were 1.22 billion tonnes of corn harvested, with total consumption at 1.214 billion and a carryout of 285 million.

Soybeans had somewhat more notable alterations from June to July, with global production reduced by four million tonnes at 386 million. That reflected the losses being incurred in South America but offset a little by gains elsewhere in the world. Total consumption held firm at 376 million and the carryover was cut by two million at 54 million.

In 2021-22 world soybean production topped 351 million tonnes, with consumption at 362 million and ending stocks at 43 million.

The IGC’s next report is scheduled for Aug. 18.

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For the 2021-22 crop year, the IGC bumped up total global grain production by three million tonnes at 2.287 billion tonnes, compared to its March report. For the coming year, the council projected total world production to slip about 0.5 per cent at 2.275 billion tonnes.

The IGC cited uncertainties in crop production due to the war in the Ukraine and reduced output in South America, countered by increased production in Asia.

The council added three million tonnes of total global consumption for the current year, now at 2.281 billion tonnes. It raised it further to 2.302 billion tonnes for the coming crop year. While world ending stocks nudge up by one million tonnes at 608 million, they are expected to fall back 4.4 per cent in 2022-23 at 581 million.

Global wheat saw few notable changes, with total consumption set to rise 0.9 per cent in 2022-23 at 785 million tonnes. In turn that’s to generate a 1.8 per cent drop in ending stocks, at 277 million tonnes.

The IGC’s projections for corn were somewhat more pronounced for the new crop year. While global corn production in 2022-23 was projected to slip almost 1.1 per cent at 1.197 billion tonnes, consumption is to increase 1.4 per cent at 1.218 billion. That will drop ending stocks 7.3 per cent in 2022-23, to 265 million tonnes.

Soybeans also had some significant changes, with the IGC raising world production by 9.7 per cent in 2022-23 to 383 million tonnes. Consumption was pegged to grow 3.6 per cent next year at 373 million tonnes, with the carryout to drop 7.3 per cent to 265 million tonnes.

Table: International Grains Council projections for old- and new-crop production, export, consumption and ending stocks as of April 21, 2022, in millions of metric tonnes. IGC March 2022 figures included for comparison.

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The IGC slightly nudged its estimate of total world grain production from its August estimate of 2.23 billion to September’s 2.227 billion tonnes. The September forecast is 2.1 per cent more than total global production in 2019-20.

The 2020-21 carryover was lowered from August’s 630 million tonnes, to 628.9 million. That’s five per cent lower than the 2019-20 carryout.

World corn production is to remain on the upswing, according to the council, but by not quite as much in its September report. Global production was reduced from 1.167 billion tonnes to 1.16 billion. In comparison to the amount of corn grown around the world in 2019-20, it makes for a 3.5 per cent increase.

Meanwhile, increased consumption was slated to further reduce corn ending stocks. The IGC cut its forecast from 288.2 million tonnes in its August report to September’s 284.7 million. Compared with 2019-20 ending stocks, that’s a drop of almost 5.3 per cent.

The IGC reduced its forecast for world wheat production by 100,000 tonnes from the previous month’s 763.4 million, to a September estimate of 763.3 million. That’s about 0.14 per cent more than the amount of wheat produced globally in 2019-20.

Wheat carryover remains higher than last year’s 279.2 million tonnes, now at 293.8 million, some 200,000 tonnes more than the IGC called for in August.

Soybean production across the globe is to remain notably higher, but a little lower than what the council forecast last month. The IGC pegged production at 373.4 million tonnes in August, which was lowered to 372.5 million in the September report. That would still make for a jump of 10.1 per cent compared to what was produced in 2019-20.

Carryover was revised to 50 million tonnes from August’s 52.2 million. That, as well, remains higher than 2019-20 ending stocks of 46.9 million tonnes.

The IGC’s next supply and demand estimates are scheduled to be released Oct. 29.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The U.K.-based council forecast world production at 2.175 billion tonnes, which would be an increase of three million tonnes from its February report. The IGC said that’s largely based on higher corn production in the European Union.

Also, the council’s March estimate was approximately 1.7 per cent higher than its 2018-19 production forecast. For 2020-21, the IGC called for total production to reach 2.223 billion tonnes.

The council pegged the global carryover at 607.9 million tonnes, for an increase of four million from February. The IGC estimated the 2018-19 carryover at 624.9 million tonnes and projected it to fall to 604.6 million in 2020-21, due to increased global consumption.

In terms of wheat, the IGC maintained its global wheat production forecast at 763.2 million tonnes in its March report. That’s 4.2 per cent more than the council’s 2018-19 wheat production estimate, with most of the change accounted for in a sizeable EU production increase. For the coming crop year, the council projected wheat production to further increase to 768.5 million tonnes.

The IGC also maintained its global wheat carryover at 274.7 million tonnes, which is 10 million more than its 2018-19 estimate. The council expects the carryover to inch up by nearly three per cent in 2020-21.

Corn production was projected to remain lower in 2019-20, largely due to a production drop in the United States. However the IGC raised its March forecast from February’s by four million tonnes to now 1.116 billion tonnes.

The council estimated 2018-19 global production at 1.13 billion tonnes and projected it to jump to 1.157 billion in 2020-21.

The global corn carryout is expected to dip sharply from the 2018-19 estimate of 323.1 million tonnes. In the IGC’s March report it put the 2019-20 carryout at 289.3 million tonnes, which is an increase of five million tonnes from February. For 2020-21, the council forecast the carryover to drop further, to 274 million tonnes, because of increased global consumption.

The council predicts global soybean production to ease in 2019-20, although by not as much as forecast last month. In its February report, the IGC said soybean production would be about 345 million tonnes, but lowered that to 340.9 million in its March report largely based on reduced production in the U.S. That’s now 21.4 million tonnes less than the council’s 2018-19 production estimate. However, it forecast bean production to jump to 366.1 million tonnes in 2020-21.

The IGC also predicted the soybean carryover to be significantly lower in 2019-20 than in the previous marketing year. The council put its March estimate at 38.2 million tonnes, about one million less than its February prediction. That’s down from the IGC’s 2018-19 estimate of 54.9 million tonnes. For 2020-21, the council forecast the carryover to increase slightly to 39.8 million tonnes, as consumption eases a little.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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In the report, released Thursday, Coceral pegged total grain production for the European Union and United Kingdom in 2020 at 302.7 million tonnes, which would be down from the 2019 level of 308.9 million tonnes.

Of that total, wheat production (excluding durum) is forecast to be down five per cent on the year at 137.9 million tonnes.

The decline was linked to acreage reductions in France, Germany, Denmark and the U.K., after heavy rains hampered planting operations in the fall. Yield reductions are also forecast for France, Denmark and the U.K.

Coceral forecasts European barley production in 2020 at 60.8 million tonnes, which would be down from the 62.2 million tonnes grown in 2019, with most of the reduction linked to a return to average yields.

While wheat and barley production may be down on the year, the corn crop is forecast to rise by 6.5 per cent, to 65 million tonnes, as wet weather that hampered fall seeding for winter grains should see some extra area seeded to corn.

European rapeseed production is forecast at 17.1 million tonnes, which compares with the 16.7 million tonnes grown the previous year.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Russia is blessed with many advantages that strengthen its position as a wheat exporter:

• Russian wheat production is in close proximity to Egypt and Turkey — two of the world’s largest wheat importing markets.
• There is ample arable land — Russia possesses almost 10 per cent of the world’s arable land (122 m ha).
• A large proportion of Russia’s wheat production comes from regions adjacent to several Black Sea ports.
• Grain land freight costs in Russia are low, with most grain transported by truck over short-haul distances.
• Russian grain production is increasingly dominated by large, vertically integrated agro-holdings using state-of-the-art agricultural production techniques and equipment to generate efficient production of high-quality grain.
• A range of government programs, including subsidies on inputs and interest rates, supports grain production in Russia.
• Increased upgrade of, and additional investment in, grain storage and port infrastructure in Russia will accommodate larger crops.
• Russian ports are a mixture of deep-water ports, which can load panamax and handymax vessels for distant markets, and shallow-water ports on the Sea of Azov, which can load smaller coasters to economically ship small parcels to closer markets in the Mediterranean. These shallower ports also give buyers the ability to target specific quality wheat in smaller volumes.
• Up-country storage in Russia is a usable mix of public elevators and on-farm storage.
• Compared with the EU, Australia and North America, Russia has relatively low agricultural land values and a low cost of grain production.
• Medium-protein hard wheat produced in Russia is ideally suited to Middle Eastern flat breads, creating a useful synergy with the country’s proximity to these markets.
• The recent weakness in the ruble ensures FOB grain prices make grain production relatively profitable in Russia.

Weaknesses

Despite its strengths, there are weaknesses in Russia’s grains industry:

• The Black Sea is Russia’s only viable outlet for exporting large volumes of grain. Any effort to export wheat produced in Siberia means a 4,800 km journey west to the Black Sea or the same distance east to Vladivostok. Grain produced away from the Black Sea is therefore steeply discounted in view of the costs involved in bringing it to port.
• Russian wheat has a relatively poor reputation for producing Western-style breads and Asian noodles, so there is little chance of displacing DNS, CWRS, APH and even HRW in premium Asian markets.
• Since Russia historically gives priority to the availability of affordable food for its citizens, it is unable to use stability of supply as a selling point. Countries with delicately balanced food security will likely be reticent to base their wheat importation requirements on unstable Russian supply.
• Russia’s wheat customers tend to be some of the world’s most price-driven markets, creating few avenues for the extraction of premiums for quality.
• Many small-to-medium-size farms in Russia are forced sellers of their grain. Inadequate and inferior on-farm grain storage, price inflation and inability to access price risk management tools force many farmers to sell at or near harvest.

(Above analysis compiled from AEGIC report)

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“There’s no shortage of cars, and there’s no problems in shipping,” said Sheldon Affleck, president of Regina-based shortline Big Sky Rail.

A year ago, rail companies struggled to meet commitments, grain car orders were behind and elevators were full. “Everybody wanted to sell at the same time. Now what we’ve got is more of an average crop,” Affleck said.

Last year’s wheat production hit 29 million tonnes, according to Statistics Canada; this year’s production is estimated at 26.1 million.

Farmers have also been reluctant to sell this year due to low prices, Affleck said. “Plus there is some product out there that is poor quality and not marketable.”

Canadian Pacific Railway (CP) has been steady in its deliveries to shortline transporter Great Western Railway, delivering 100 per cent of car order supplies, according to Andrew Glastetter, general manager at Shaunavon, Sask.-based GWR.

“A large part of that is we’re doing a softer crop year than last year,” he said — but communication with the rail carrier has also improved this year, he added.

“We’ve had a big focus on our railway of working closely with CP to find out the things that we can do to make sure that we’re kind of more user-friendly for them as well.”

GWR has been turning cars around on the line as fast as possible, he said, and encouraging customers to do the same with loading.

“We’ve cut down on how many outstanding orders there are, and we’ve had a big focus on efficiency.”

The data on car deliveries to shortlines is not readily available, but the recent AG Transport Coalition report shows CP and Canadian National Railway (CN) have significantly improved the timeliness of their deliveries from last year.

For the grain year so far, 89 per cent of hopper car orders have been delivered by CN and CP for the wanted week, which compares with the previous year when CN and CP supplied 62 per cent and 36 per cent of cars ordered by shippers in the week in which they were ordered, according to coalition data.

A shortfall in the supply of railway cars and deteriorating service were named as the primary cause of delays in that year.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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