The Weekly Times Now reports that world wheat stocks 'to increase'.
(emphasis mine) [my comment]
World wheat stocks 'to increase' [This title is intentionally misleading]
June 12, 2009
US and world wheat ending stocks are expected to increase in 2009/10, despite an assumed reduction in production, the US Department of Agriculture says.
1) wheat ending stocks are NOT expected to increase in 2009/10 by anyone who has a clue what is going on in agriculture today.
2) "assumed reduction in production"? Try GUARRANTEED reduction in production.
3) This entire article is a desperate/dishonest attempt to portray bullish fundamental (looming food shortage) as bearish.
This view contrasts to its projections for 09/10 coarse grain and cotton ending stocks which are expected to fall, the latest CBA Agri Insights reports.
An assumed rebound in global oilseed production in 09/10 will result in oilseed ending stocks increasing from 08/09 levels, but they will remain at tight levels according to the USDA in its June 2009 World Agricultural Supply and Demand Estimates (WASDE).
World wheat production in 09/10 will decline from the record harvest posted last year. The USDA now expects that production in this season will reach 656.1 million tonnes (mt), 26mt or 3.8pct below the 08/09 crop. [Way too optimistic]
However, the 09/10 crop will still be the second largest crop in history. [Impossible]
The USDA's latest estimate of 09/10 crop also represents a 1.6mt reduction from their prior estimate which was released in May. Wheat production estimates where revised lower for:
— European Union (-2.3mt) as result of lower yields in Hungary, Romania and Spain due to dryness.
— Canada (-1mt) due to dry conditions in Alberta and Saskatchewan and cold conditions that delayed spring wheat plantings.
— Ukraine (-1mt) due to dry conditions in April and May which cut yield potentials.
However, crop potentials for 09/10 were revised higher for Russia (+1mt, due to an expected larger area and improved spring wheat crop prospects) and China (+0.5mt, due to a larger area).
World wheat consumption estimates have been revised lower by nearly 1mt to 641mt, mainly due to reduced wheat feeding in Ukraine and the United States, and lower food use in Russia.
But despite the downward revision, consumption in 09/10 will be a new record at 8mt more than 08/09 levels and 25mt more than 07/08 levels.
Global wheat ending stocks for 09/10 were unexpectedly revised higher by 750kt to 182.7mt, the highest level for many years and well beyond the lows of 120mt in 07/08.
Higher carry-in stocks and lower consumption estimates were the primary factors contributing to the higher stock levels.
World wheat stock to use ratios are expected to climb to a comfortable 28.5pct in 09/10 [This is clear manipulation of data to suppress grain prices. It is propaganda], which is up slightly from the prior estimate and significantly higher than actual the 19pct lows in 07/08.
A big increase in Russian stocks (+2.5mt), plus moderate increases in the United States and the "other countries" offsets lower ending stock estimates for the EU and Canada.
USDA Propaganda Contrasts Sharply With Reality
Below is a batch of entries on the world's agricultural situation from Nogger's Blog.
Tuesday, 16 June 2009
Wheat: Living On The Edge
The wheat market has certainly taken quite a tumble in the past few weeks [In big part due to the misleading data released by the USDA]. Since recent June 1st highs we've seen London wheat fall 14%, with Paris down 13% and Chicago wheat 12.7% lower. That's some pretty hefty losses in just a fortnight.
For those that would blame the influences of the "outside markets" crude oil has actually risen 9% during the same period.
So what is it with wheat? Good old-fashioned supply & demand? [No]
Lets have a look at supply, or to be a bit more specific world trade. According to the USDA the world's largest wheat exporters in 2008/09 will be:
The US, the EU-27, Russia, Canada, Australia, Ukraine & Argentina. These are the top six nations that keep much of the world supplied with wheat.
Let's have a look at their production prospects for 2009/10:
________2008/09 (MMT)____2009/10 (MMT)
So the top six exporting nations that account for over half of world production and 87.5% of global trade in wheat are set to see their output fall by around 35.6 MMT in the year ahead.
Indeed, it looks a nailed-on certainty that Argentina won't even have any wheat to export at all in 2009/10, and will probably be a net importer (despite the fact that the USDA currently has them down to export 4 MMT next season).
So it must be world demand that's falling then? The world's top six importers, and their likely requirements for 2009/10, according to the USDA:
________2008/09 (MMT)____2009/10 (MMT)
Total ________ 41.6________37.6
So the top importing nations are seen using 4 MMT less in 2009/10, well that's handy, if they were planning on buying it from Argentina, they'll probably find that it isn't available anyway!
So where's the rest of the production shortfall coming from, how are we going to feed the world? Global stocks of course. So with global wheat stocks having been in steady decline since 1998/99, we've had one decent harvest to help replenish them before we start digging into them again.
And what happens if Australia have another El Nino drought year? [This is happening. See below] That could wipe another 10 MMT off world supply quite easily.
We do like to live on the edge don't we?
Sunday, 14 June 2009
Oil World Slashes Argentine Wheat Acreage Estimate
Oil World now predict that Argentine farmers will plant just 2.8 million hectares of wheat this season. That is down sharply on their forecast last month of 3.6 million hectares, and a gigantic 39% drop on last year. It is also 400,000 hectares beneath the last figure from the Buenos Aires Grain Exchange, although they did warn that things were likely to get worse not better.
Not only has the country been hit by the worst drought for 70 years, which has now lasted eighteen months, but there are also huge financial disincentives to plant wheat.
The way things look right now the world's fifth largest wheat exporter just a couple of years ago won't even be self-sufficient in wheat in 2010.
What size do we now put on the Ary wheat crop for 2009? The USDA left their production estimate unchanged at 11 MMT on Wednesday. [Clear USDA PROPAGANDA] That looks hopelessly optimistic given that planted acreage is seen down almost 40%, yet they are forecasting a crop 33% higher than last year!
Using Oil World's acreage number, if Argentina was to get the same 2 MT/ha yield as last year's drought-ravaged crop then we would only have a final production figure of 5.6 MMT. The USDA are currently using a yield figure of 2.75 MT/ha which would give us final production of 7.7 MMT. Two years ago in 2007/08 yields were 2.92 MT/ha, even a return to those halcyon days would only give us a final output of 8.18 MMT.
Saturday, 13 June 2009
Spanish Grain Harvest Seen 'At Least' 33 Pct Lower
With the harvest underway in the south of the country, analysts are forecasting this season's Spanish grain harvest to be "at least" a third lower than last season's bumper 23.2 MMT.
Spanish farmers' union Asaja say that this years grain harvest will only total 15.4 MMT, due to a combination of lower plantings and an acute lack of rainfall during March/April.
Other farm groups say that final production could come in as low as 13.5 MMT, a 42% decrease, as the harvest has not yet begun in the northern Castilla-Leon region that normally accounts for half the country's wheat production, where output is seen as much as 50% lower.
At the end of last year when farmers were making their planting decisions the costs involved in producing a 3.1mt/ha yielding wheat crop were around 600 euros, with 3.1mt of wheat at the time worth only 420 euros.
Many farmers therefore decide to either leave the land fallow or planted lower-maintenance crops like rape, sunflowers, field peas or vetches.
Spanish domestic cereal consumption is just under 30 MMT per annum. Even with a record carryover of an estimated 4.7 MMT of grain from the 2008/09 bumper crop, this leaves the country needing to import around 15 MMT in 2009/10 to cover it's needs.
With Spain the UK's top destination for wheat exports, this is pote ntially great news for us as they could easily take our entire reduced exportable surplus for 2009/10 in one fell swoop.
Friday, 12 June 2009
eCBOT Close, Early Call
For soybeans it's still all about old-crop tightness. The US will not run out of beans everybody keeps re-assuring us, prices will ration demand, China have more than enough and will go away etc. [More PROPAGANDA]
The USDA projected ending stocks at 110 million bushels earlier this week. That might be the lowest for 32 years, and the tightest stocks to usage ever, but it's still a surplus isn't it?
Well, that's true, but where were the physical ending stocks last year when the September contract closed more than four limits up on the last day of trade? They were more than double then what they are projected to be this year, but physically where the hell actually where they? Nowhere to be seen, floating around in the USDA ethereal, that's where they were.
Wednesday, 10 June 2009
Time To Cry For Argentina?
It's all gone wrong for Argentina, the eighth largest country in the world, the fifth largest exporter of wheat in the world just two years ago, and the world's largest consumer of beef per capita.
Crippled by drought, inflation, punitive taxes and crippling red tape the agricultural sector has gone to the dogs.
Amid raging inflation the government of President Cristina Fernández de Kirchner is trying to control food prices by sporadically preventing their export, and what is allowed to leave is being taxed to the hilt.
In the grip of the worst drought the country has seen for 70 years, coupled with an acute lack of credit, farmers are scrimping on fertilisers to replenish the soils they plunder.
Already expected to plant the smallest wheat crop since records began a hundred years ago, the Buenos Aires Cereals Exchange warn that plantings are likely to fall significantly lower than their most recent estimate of 3.2 million hectares.
In 2008, for the first time ever, Argentina exported less beef than Uruguay, despite being almost fifteen times bigger.
One farmer interviewed by the Scotsman said that the country is expected to have to import beef as from 2011, and will only have enough wheat to cover internal consumption next year — and that is only if it starts to rain.
"Even if it does rain, most farmers are looking at alternate grains such as oats, barley and any other product that does not involve an export tax," he added.
"The country considered to be one of the breadbaskets of the world is falling towards international oblivion."
Weekly Times Now reports that Australian El Nino drought blow.
El Nino drought blow
June 17, 2009
AUSTRALIAN farmers have been warned that a powerful drought-inducing El Nino is on its way.
Japanese forecasters believe the El Nino event will wipe out southeast Australian farmers' hopes of good winter and spring rain.
The forecast has come as a shock to farmers, as only last month the Japanese predicted the east Indian Ocean would warm, leading to more rain in southeast Australia.
But last week Japan's Frontier Research Center for Global Change released its June computer forecast showing Australia's drought would continue for the next six months.
"The strong El Nino has killed the negative Indian Ocean Dipole," JAMSTEC senior scientist Jing-Jai Luo said. "The problem is El Nino still has a strong influence on the Indian Ocean."
Farmer confidence in the Japanese model has grown in recent years, especially after JAMSTEC team leader Prof Toshio Yamagata reliably predicted the continuation of the drought in May 2007, months ahead of other climate analysts.
Swan Hill grain grower Geoff Nalder said farmers would pay a lot of attention to Prof Yamagata's forecast.
"He's been right on the money for the past three years," Mr Nalder said. "It's going to make us more cautious. We'll put our purchases on hold and trim back in other areas."
Victorian Farmers Federation grains group deputy president Andrew Weidemann said Prof Yamagata's latest forecast was depressing news for a lot of growers given the confidence many farmers had in the Japanese forecast.
"It sends a significant signal to change your management decisions given all the signs are pointing to a poor spring," Mr Weidemann said.
Drought has already driven Dartmouth Dam down to 21 per cent, Lake Eildon 12.6 per cent and Waranga Basin to 15 per cent of their capacities.
Stormx reports that Canada canola production threatened by drought.
SOYBEAN HIGHLIGHTS: Good Night Report for Thursday June 11
By Gail Martell
Updated: June 11, 2009
The USDA plugged in a low production estimate for the Canada 2009 canola crop on the June Supply-Demand report predicting the harvest would shrink 18% below last year -- a record setting season for both production and exports. The USDA estimate may not be low enough, considering how crop development has been delayed by severe cold and drought is threatening Alberta and western Saskatchewan. [More evidence the USDA is misleading investors.]
The top canola province Alberta is experiencing the driest conditions since 2001. Subsoil moisture in the province had deteriorated to 38% poor, 42% fair, 19% good and 1% excellent, as of June 4th, according to the Alberta crop lettter. Key canola crop districts in central Alberta have not received any significant rainfall in the last 2-3 weeks.
My reaction: USDA is manipulating data in every way to hide the coming food catastrophe.
1) The USDA is predicting wheat ending stocks to increase in 2009/10 and expects world wheat stock to use ratios are expected to climb to a comfortable 28.5pct.
2) The USDA now expects that production to be down ONLY 3.8 percent.
3) The media is filled with bearish stories despite the bullish fundamentals: the US will not run out of beans everybody keeps re-assuring us, prices will ration demand, China have more than enough and will go away etc.
4) The USDA is predicting 33% increase in Argentina's wheat crop despite planted acreage being down almost 40%.
5) The USDA estimate for the Canada's 2009 canola crop is not low enough, considering how crop development has been delayed by severe cold and is now being threatened by drought.
6) Due to USDA misleading data and propaganda, the wheat market has tumbled in the past few weeks.
7) Argentine farmers will plant just 2.8 million hectares of wheat this season, a gigantic 39% drop on last year.
8) Argentine, once the world's fifth largest wheat exporter just a couple of years ago, won't even be self-sufficient in wheat in 2009/10.
9) Spanish grain harvest to be "at least" a third lower than last season's bumper 23.2 MMT, with final production could come in as low as 13.5 MMT (a 42% decrease).
10) Last year, when the September soybean contract closed more than four limits up on the last day of trade, the physical ending stocks for soybeans were more than double then what they are projected to be this year. This is evidence of the USDA overstating inventory levels.
11) Australian farmers have been warned that a powerful drought-inducing El Nino is on its way. The El Nino event will wipe out southeast Australian farmers' hopes of good winter and spring rain, and Australia's drought would continue for the next six months.
Conclusion: Given how starkly USDA estimates contrast with reality, there is no way the flaw data being released is an innocent mistake. The USDA is deliberately misleading investors about the true state of the world's food supplies. However, no matter how much the USDA tries to hide it and wish it away, the world is headed for a catastrophic fall in food production in 2009.