World coarse grains production up for both 2011/12 and 2012/13

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Global coarse grain production in 2012/13 is projected up 3.6 million tons this month to 1,231.6 million, mostly based on increased area prospects in some countries. World corn production is increased 4.2 million tons to 949.9 million, but barley is cut 0.7 million to 134.7 million. There is also a small increase for millet prospects in Ukraine.

The 2012/13 corn area forecast for China is raised 300,000 hectares to 34.3 million as net returns per hectare for corn continue to be more favorable compared with soybeans (soybean area is also forecast lower by 300,000 hectares). This 2.0 million-ton increase brings China’s total corn production in 2012/13 to a record 195 million tons.

A good illustration of corn’s expanding competitiveness relative to soybeans in China is visible in the important grain-producing province of Heilongjiang, which typically accounts for 40 percent of national soybean area and 13 percent of national corn area. The chart below shows the ratio of soybean to corn cash prices in Heilongjiang during March, as farmers started to make planting decisions and purchase inputs for the upcoming corn crop year. Rapidly expanding domestic demand for corn on the industrial and feed side, as well as supply constraints, continues to enhance the competitiveness of corn in China.

Technology has also played a role in the expansion of corn area in China. Availability of high-yielding early maturity corn varieties has enabled farmers to plant corn in areas previously only planted to soybeans, such as in Heilongjiang where the number of frost free days per year is the lowest in China.

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EU 2012/13 corn production is increased 1.1 million tons this month to 64.2 million based mostly on increased area reported for Hungary and Poland. Dryness and cold winter temperatures hurt some winter rapeseed and wheat, causing winter-kill that has increased area sown to spring-planted crops. EU barley prospects are nearly the same as a month ago as a significant area-based increase for Germany, and smaller increases for Poland, Hungary and Italy, are offset by a significant reduction for Spain and a small decline for Bulgaria, countries where reduced area and yield are confirmed by preliminary harvest reports.

Russia’s corn production for 2012/13 is raised 0.8 million tons this month to a record 7.8 million as planting reports indicate producers have sown more than 100 percent of planting intentions. Last year’s corn crop was profitable compared to most other crops, and this year, area is forecast up 23 percent. Russia’s barley area is also raised this month, but winter barley yields have come in below expectations, offsetting the area increase. Sowing progress reports from Belarus indicate a sharp increase in corn plantings, boosting production prospects 0.3 million tons to a record 1.3 million.

World coarse grain production for 2011/12 is estimated up 2.5 million tons this month to 1,145.0 million, with all the changes in corn. The largest increase is for Brazil, up 2.0 million tons to a record 69.0 million. The second-crop corn has received exceptionally favorable rains in areas like Mato Grosso, where the dry season normally cuts corn yield potential. The huge second crop more than offsets reduced first-crop area and below-trend first-crop yields, boosting the total corn production to record levels. For the first time, second-crop yields are estimated higher than first-crop yields, with second-crop accounting for nearly half of corn production. Partly offsetting is a 0.5-million-ton reduction for corn production in Argentina, to 21.0 million as excessive rains and flooding have delayed the corn harvest and caused some yield loses.

China’s statistical agency recently reported 2011/12 corn production at a record 192.78 million tons, up 1.03 million from last month’s USDA estimate.

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