World wheat production prospects increase significantly this month

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Global production for 2011/12 is up 9.7 million tons this month to 672.0 million, and foreign wheat production is up 10.5 million tons, as increases for the FSU-12, India, China, and the EU-27 swamped decreases for Argentina, U.S. and Mexico.

Wheat production in the three main FSU-12 wheat producers (Russia, Ukraine, and Kazakhstan) is increased 7.0 million tons this month to 93 million.

Russia’s projected wheat production is up 3.0 million tons this month to 56.0 million, with winter wheat yields at the second highest ever, 2008 being the record. The winter wheat harvest has been more than 75 percent completed in the South and North Caucasus Districts, and reports indicate exceptionally strong yields. Also, spring wheat growing conditions have been favorable in most of the country’s regions, especially in the Urals, upper Volga Valley, and most of Siberia with good timely rains, though parts of Siberia (Altai) and the Central District have suffered from dryness.

According to the government agency responsible for grain quality evaluation in Russia, this year the quality is expected to be better than average, with the share of food wheat at 75 percent. Ukraine’s wheat production prospects are also increased 3.0 million tons this month to 21.0 million. Despite delayed crop development, dry spring weather, and excessive precipitation during the harvest, reports indicate high wheat yields, with about 95 percent of wheat being harvested. However, the crop’s quality has been reduced by rain during harvest, and a higher than usual share of the crop will probably not reach milling quality. Excellent moisture level and good growing conditions in Kazakhstan justify a 1-million-ton increase to 16.0 million in its projected wheat output.

India’s wheat production for 2011/12 was increased 1.9 million tons this month to a record 85.9 million, based on revised government estimates. Most of the crop was harvested months ago, and the government estimate should be close to final.

China’s wheat production is increased 1.5 million tons to 117.0 million. With the winter wheat harvest complete, a recently conducted a sample survey indicated an increase in winter wheat output of approximately 2.0 million tons over the last year, while the spring wheat harvest is expected to be lower by about 0.2 million tons. The winter wheat harvest is complete and spring wheat will be harvested in August.

Wheat production for the EU-27, the world’s largest producer, is up 1.4 million tons this month to 133.5 million. Abundant rains in July improved yield prospects, but reportedly hurt wheat quality. The largest increase was reported for France (up 1.2 million tons), with most of the crop already harvested. It appears that heavy soils that are predominant in northern France (unlike sandy soils typical for Germany) were able to preserve winter moisture leaving them more resistant to spring dryness than expected. Higher wheat production was also reported for Bulgaria and Romania, up 0.3 million tons each, with smaller increases for several other countries. These increases were partly offset by reduced production for Belgium, Denmark, Spain, Poland, the Netherlands, and several other countries where yield prospects were trimmed.

There were also small increases of wheat production in Moldova and Serbia, reflecting harvest reports.
These increases were partly offset by reduced production prospects in Argentina and Mexico. In Argentina, despite good planting conditions in most areas, uncertainty about government export policy and relatively unfavorable prices for wheat has caused a drop in forecast area in favor of barley. Barley is not covered by export quotas and is also a good rotation crop for soybeans. The normal period for wheat planting in Argentina is almost over and it seems unlikely that previous planting projections will be realized. Wheat area is projected down 0.5 million hectares in 2011/12, with production down 1.5 million tons this month to 13.5 million. There was also small reduction this month for the forecast for wheat production in Mexico, following a government report.

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