More bearish news related to the global supply of grains was released Tuesday.
The Australian government's Australian Bureau of Agricultural and Resource Economics and Sciences released updated production estimates for 2016/17, with estimates for winter crop production of all crops increased 12% from previous December estimates and 49% higher than achieved in 2015/16 to 58.9 million metric tons. Dow Jones reports Acting ABARES Executer Director Peter Gooday stating, "The revised winter crop estimate was the result of yields being higher than anticipated and reaching previously unseen levels in most regions."
As seen on the attached chart, the estimate for 2016/17 wheat production was boosted by 2.5 mmt since December to a fresh record 35.134 mmt (brown bar), which is up 45.4% from last year and almost 10 mmt higher than the five-year average. This follows the USDA's recent estimate of 33 mmt, with global ending stocks reduced by 4.7 mmt to 248.61 mmt. Australian news source theland.com reports a record export program of all grains underway, stating, "Currently, the prices on offer in Australia are more than competitive on the world stage and that is attracting that buyer demand allowing grain exporters to execute deals." Noted buyers include China and India, as well as mentions of durum being shipped to Italy.
Barley production in Australia was increased by 2.78 mmt since December to 13.414 mmt. This volume is up 56.1% from 2015/16 and is well-above the five-year average of 8.4 mmt. Theland.com points to steady demand for Australian feed barley in both China and the Middle East.
Canola production in Australia was increased by 563,000 mt, to 4.144 mmt, tied with the record production estimated for 2012/13. This volume is 40.8% higher than reported in 2015/16 and 567,000 mt higher than the five-year average, while also increasing exportable supplies available for export to Asia.
The largest year-over-year increase in Australian production was seen in pulse crop production, consisting of chickpeas, fababeans, field peas, lentils and lupins. Total production is estimated at 4.044 mmt, up 528,000 mt released in the December estimate. This volume is 68.9% higher than achieved in 2015/16 and well-above the five-year average of 2.24 mmt.
The largest production was reported for chickpeas at a record 1.407 mmt, although the year-over-year increase in production was the smallest on a percentage basis at 39.9%. The largest year-over-year percent increase was seen in lentil production with a 140% increase to 620,000 mt.
This added global production falls at a time when India has just seeded a record acreage of pulses in its winter or Rabi crop, with high hopes following two consecutive years of drought and weather challenges that saw the country rely heavily on imports. In related pulse news, producer.com reports on a recent decision by India's government to deny an extension of the country's methyl bromide fumigation policy exemption, which calls for all agriculture commodities to be fumigated at the country of export. The exemption expires March 31, which discriminates against Canadian exports, as the country can be too cold for proper fumigation and will favor exports from warmer climates.
Oat production was also boosted but only slightly from the December estimate to 1.879 mmt, although is 43.7% higher than achieve in the previous year and well-above the five-year average of 1.2288 mmt.
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