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World Cereal Production To Set New Record This Year

May 14, 2021
tags: ,

By Paul Homewood

 

What climate emergency?

Latest data from the UN suggests that world cereal production will set another record high for 2020/21:

 

image

http://www.fao.org/worldfoodsituation/csdb/en/?mc_cid=237e2f4244&mc_eid=4961da7cb1

7 Comments
  1. David Parker permalink
    May 14, 2021 10:29 am

    This is a comment from a grain trader

    “The initial reaction to the USDA report is negative, but as always, the devil is in the detail. The algos would have been drawn to a plethora of numbers which were not in line with trade expectations and therein lies the rub. So, what was the trade expecting?

    As regards to the 2020/21 supply/demand, the market expected a drop in Brazilian maize production due to the ongoing drought, an increase in US maize exports as they had already reached their export target with 16 weeks of the season left and an increase in Chinese imports which the trade put at 33-34Mmt. What we got was a crop reduction in Brazil of 7Mmt (more later), a 2.5Mmt increase in US maize exports and a 2Mmt increase in Chinese maize imports to 26Mmt, all of which is debateable. The main bone of contention is the Brazilian maize crop size with most private estimates somewhere between 85-95Mmt, which if correct not only means further crop reductions in future reports which will push further demand to the US, which they don’t need as it will push prices higher and increase wheat feeding. It is this scenario in the short/medium term that should support prices.

    Moving onto 2021/22 the USDA have solved the longer-term problem by offering us “jam tomorrow” with massively optimistic maize crops/yields in the US, Brazil, Argentina, China, and Ukraine and wheat crops in Russia and the EU none of which are home and hosed and some of which are already experiencing less than ideal conditions.

    The initial reaction to the USDA report is negative, but as always, the devil is in the detail. The algos would have been drawn to a plethora of numbers which were not in line with trade expectations and therein lies the rub. So, what was the trade expecting?

    As regards to the 2020/21 supply/demand, the market expected a drop in Brazilian maize production due to the ongoing drought, an increase in US maize exports as they had already reached their export target with 16 weeks of the season left and an increase in Chinese imports which the trade put at 33-34Mmt. What we got was a crop reduction in Brazil of 7Mmt (more later), a 2.5Mmt increase in US maize exports and a 2Mmt increase in Chinese maize imports to 26Mmt, all of which is debateable. The main bone of contention is the Brazilian maize crop size with most private estimates somewhere between 85-95Mmt, which if correct not only means further crop reductions in future reports which will push further demand to the US, which they don’t need as it will push prices higher and increase wheat feeding. It is this scenario in the short/medium term that should support prices.

    Moving onto 2021/22 the USDA have solved the longer-term problem by offering us “jam tomorrow” with massively optimistic maize crops/yields in the US, Brazil, Argentina, China, and Ukraine and wheat crops in Russia and the EU none of which are home and hosed and some of which are already experiencing less than ideal conditions.

    We are already seeing political intervention in our markets, Russian taxes being the prime example, which is inconsistent with a free market. There are those that argue that the USDA numbers may also be politically motivated. So, when Conab, a federal government company in Brazil, responsible for managing agricultural and supply politics ensuring the basic needs of the society, come out with a maize crop estimate on the same day as the USDA with a crop of 106Mmt (USDA 102Mmt) it is probably fair to question whether that is a fair reflection of the crop size or a politically motivated number aimed at weakening rampant domestic prices! Gathering reliable market data in a world where countries, rightly or wrongly put self interest first and foremost, makes markets less and less transparent. With this in mind it was interesting to discover that “Cofeed”, a leading provider of agricultural data in China, had suspended operations and closed offices without explanation. One can only speculate who would gain from supressing reliable Chinese data! ”

    Not as simple as it seems!

  2. JimW permalink
    May 14, 2021 10:34 am

    Not sure about this. There is a lot of concern about production in the US this year because of weather conditions in the relevant States, the agri price indices are going vertically upwards.
    Nothing to do with CC, but it feels like someone is rigging the system on a global scale with the shipping problems etc. There are some thoughts its to try to reduce feedstocks of the animals used to feed the world, as part of a move towards ‘nu-meat’ and other substitutes.
    As usual there are $billions involved.

  3. May 14, 2021 11:41 am

    When this information is freely available, why on earth would anyone at the BBC ONLY run local bad harvest stories which clearly have to be weather related?

    No weather and therefore production is consistent year on year. One year there maybe seasonally unusual temperatures or rainfall. In the overall scheme of this averages out. This is not climate.

    However to return to my origin point. With worldwide production data showing record food production right across the board year on year how does that fit with the claim of a climate crisis? Surely this is one of the biggest issues which should be a result of a “crisis”? The answer is it does not so when individuals or institutions try to pretend there is a problem then I see this as criminal and therefore an issue for the Police.

    Why does the year on year record production not receive even a mentioned from the BBC who instead search the media to find one farmer in one local area who had a couple of bad years (for many possible reasons), make a headline out of it and default blame it on CC offering us not only the “opinion” of the humanities graduate writing the piece but also of one more nameless “professor” who will sing from the same song sheet hyperventilating without specifics of the case of course but about the climate crisis in general they claim to believe in and how socialism will save us?

    To me it is a clear indication of a wilful and premeditated intention to deceive the population which not only goes against the BBC Charter but is of criminal intent. It is not just fake news or spam. They are in a position of influence which they know and are clearly abusing for exactly who or what reason I cannot say.

  4. Daz permalink
    May 14, 2021 3:16 pm

    Well the corn round central TX got frosted last week , it’s late to replant if we get a normal summer

  5. May 14, 2021 6:19 pm

    Sent from Yahoo Mail for iPad

  6. June 1, 2021 10:21 pm

    Sent from Yahoo Mail for iPad

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  7. June 1, 2021 10:37 pm

    Hi Paul, I always enjoy reading your very enlightened reports. You seem rather sceptical about the takeover of the electric vehicle (EV) market from the oil burners. Me too, if only lithium is seen as the solution, but I wonder if you have heard of these ‘quantum glass’ batteries? I would be interested to know of any view you have of them. On a similar note and from the same sources, I have been reading about a Californian development of ‘Blue Gas?’ From what I have read, this seems to involve running vehicles on amonia with only  water vapour in the emissions. Much like hydrogen, but at lower cost.  I would be very interested to know of any views you have on the matter? Regards, Alistair

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