Farmer's Weekly (South Africa)
All eyes on global grain as planting gets underway
World grain production is projected to increase by more than two million tons this year to reach almost 2,8 billion tons, mostly due to higher wheat output in Argentina, Australia, Russia and Ukraine, according to the Food and Agriculture Organization of the United Nations (FAO).
However, with global inventories on the low side, the current tensions on the Russian-Ukraine border could affect eventual volumes.
Grain SA economist Corné Louw noted that a substantial volume of South Africa’s wheat was imported from Russia and Ukraine. “The [tensions] there have resulted in increased prices, although the Australian harvest has brought some relief for world stocks.”
A report by the FAO said world coarse grain production had been trimmed by 0,2%, underpinned by reductions in sorghum production estimates in Burkina Faso, Niger, and the US.
“Partly offsetting these reductions, maize production estimates have been raised in the EU, Ukraine, and the US, which registered its second- largest crop on record last year. The global coarse grains forecast still stands 1,3% higher year-on-year at 1,5 billion tons,” said the report.
In Southern Hemisphere countries, record maize plantings were forecast for Argentina and Brazil, supported by high grain prices. While dry conditions were forecast in Argentina’s key central-eastern producing area, curbing yield prospects, the weather outlook in Brazil was more favourable, and maize yields were predicted to be near average in 2022.
In South Africa, a small cutback in maize plantings was expected, reflecting excessive rainfall that delayed planting, plentiful domestic supplies and high input prices. Yields, however, were likely to remain above average due to good weather conditions so far, which were forecast to continue.
Louw said weather conditions in South America would be a key determinant of maize stocks and prices this year. “With demand currently high, there’s little room for something to go wrong.
“So, the drought in Argentina could play a big role.”
The FAO projected a global grain stocks-to-use ratio in 2021/22 of 28,7%, representing a decline from the 2020/21 level of 29,4%, but still a comfortable level historically.
By contrast, a rise in maize inventories in the US and a further build-up of stocks in China underpinned an expected 2,7% rise in global maize inventories from their opening levels. World trade in coarse grains in 2021/22 still pointed to a 1,5% contraction from the 2020/21 level. Making up the bulk of the decline, global maize trade was expected to fall in 2021/22, mostly reflecting weaker demand from China due to record production levels and higher import volumes of other feed grains.
Louw said another factor to consider was the effect of high fertiliser prices on soya bean and maize plantings in the US. “The biggest question is whether farmers will lean more towards soya beans than maize, since their fertiliser requirement is lower. If this is the case, soya bean prices will be negatively affected off the back of higher supply, while maize prices could benefit.”