As the northern hemisphere's growing season gets started, here's what we can expect, production-wise, from key croplands.
As the calendar moves toward summer, early signs indicate a strong growing season for soy, wheat and rapeseed (also called canola) in key breadbaskets around the globe.
Here, the Thomson Reuters Agriculture Research team takes a look at what’s in store.
United States crop production
United States corn and soy production has given us back-to-back record seasons, and so far, the outlook is for things to stay strong, especially for soybeans. They continue to gain acreage on corn and other crops.
Stable economic and weather conditions have Thomson Reuters current U.S. corn and soy production outlooks at 14.3 (13.6 – 15.0) and 4.31 (4.10 – 4.60) billion bushels, respectively.
Corn and soy plantings are expected to hover around 90.4 and 90.1 million acres, 2.7 percent and 1 percent above the current estimate of 88 and 89.9 million acres released in the U.S. Department of Agriculture’s (USDA) March Prospective Plantings Report.
As was the case last year, rebounding soy prices and lower production costs have made soy a more profitable crop for farmers. That’s pushing for another year where “King Corn” is brought down another notch.
In fact, it is quite possible that soy plantings will surpass corn for the first time since 1983, as suggested by the USDA in the prospective plantings report.
European Union crop production
The past two seasons were not ideal for production in the European Union, as crops were stricken with excessive precipitation or dryness accompanied by heat waves.
This season, with minor to no winterkill and sufficient precipitation in spring and early summer, wheat and rapeseed production are set to be approximately 156 and 22.7 million tons, respectively.
Production, however, can drop to 138 and 19.6 million tons with late-season spring frosts during rapeseed blooming and drought in spring and summer.
On the other hand, with adequate weather during the season, especially during wheat-heading and rapeseed-blooming stages, production may reach 162 and 24 million tons.
Higher prices and increased demand for rapeseed will likely lead to farmers sowing more winter rapeseed this year.
However, unfavorable weather conditions locally across Europe (Germany and Poland in particular) have prevented farmers from completing intended plantings, which partially offsets the potential for increased rapeseed areas.
Low barley prices will continue to decrease its planted area, as farmers switch to more profitable crops.
Black Sea crop production
For the past several years, Russia and Ukraine have been breaking one grain production record after another. What has been the cause behind this tremendous rise in grain production? Do we foresee further increases?
Starting in the late 1990s, yields in both countries began a steadily upward trend. Today, Russia and Ukraine are among the world’s largest wheat producers.
In 2017-18, Russia produced 85 million tons; Ukraine 27 million tons. Russia now holds the title of the world’s largest exporter of wheat.
The major drivers have been higher investments in agriculture, land privatization, and the creation of so-called “agroholdings,” all of which resulted in better inputs and technology.
Ukrainian and Russian farmers are using better quality seeds, along with more efficient crop protection, fertilizers and irrigation. In addition, for the past few seasons they were lucky to get the right weather at the right time.
The essentials of the global trade outlook for corn, wheat, rapeseed and soy have been captured in the latest report by Thomson Reuters Agricultural Research (Lanworth).