IGC forecasts lower wheat production in 2017-18

25.01.2017

“Although poor profitability will discourage North American wheat farmers, 2017-18 area will likely stay high elsewhere," the IGC said.

In its preliminary outlook for 2017-18 world wheat supply and demand, the International Grains Council on Jan. 19 projected world wheat production to decline about 2% from the record outturn estimated for the current year. The IGC preliminarily projected the 2017-18 world wheat crop at 735 million tonnes, down 17 million tonnes from 752 million tonnes as its estimate for 2016-17. The IGC noted should its projection be realized, world wheat production would decline for the first time in five years. The 2017-18 crop still would be the third-largest ever.

The projection was based on yields broadly in line with the long-term trend and the IGC’s projection for world harvested area for wheat.

The IGC projected the world wheat harvested area in 2017-18 at 221.3 million hectares, down just 0.3 million hectares from 22.1.6 million hectares in 2016-17 and compared with 224.7 million hectares in 2015-16.

“Although poor profitability will discourage North American wheat farmers, 2017-18 area will likely stay high elsewhere, helped by government support measures in some countries, as well as movements in foreign exchange markets,” the IGC commented.

The IGC noted the U.S. Department of Agriculture confirmed a steep drop in U.S. winter wheat area with sowings estimated at 13.1 million hectares, a 108-year low. The IGC added, “With spring wheat likely to face strong competition from alternatives, including soybeans, all-wheat harvested area is projected to decline by 8% to 16.3 million hectares.” The IGC projected Canadian harvested area at 8.6 million hectares, down 3% from last year.

The IGC projected Russian harvested wheat area to increase about 1% to 27.1 million hectares and projected Ukrainian harvested area to increase 2%, to 6.7 million hectares. China harvested area was projected to be virtually unchanged from last year at 24.2 million hectares, and India’s harvested area was projected to expand 4% to 31.5 million hectares. The European Union-28 harvested wheat area was projected at 26.8 million hectares, unchanged from 2016-17.

The largest expansion in harvested area was projected for North Africa. Harvest area there was projected at 7.1 million hectares, up 16% from 6.1 million hectares in 2016-17.

World wheat consumption in 2017-18 preliminarily was projected at 737 million tonnes, down 1 million tonnes from a record 738 million tonnes in the current year, “as a dip in use for feed just about offsets expanding food demand, seen touching 500 million tonnes for the first time,” the IGC said. “Assuming smaller, more normal quality harvests, feed (and residual) use in the United States and Canada will likely fall back from this season’s levels. Demand in parts of Asia could also contract, but much will depend on prices relative to alternatives.”

The IGC projected world wheat ending stocks in 2017-18 at 234 million tonnes compared with a record 235 million tonnes as the forecast for the current year.

“A modest decline in exporter stocks is expected, but with larger inventories in China,” the IGC said.


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