Information status as of June 26, 2013
The 2013/14 grain harvest is in its infancy. The first threshing results from the USA, Russia and Ukraine have been better than in the previous unfavorable harvest year. Expectations of a high result are quite high among market participants. Stock market prices are correspondingly weak. But the year is not over yet.
The grain harvest is spread over a period from mid-June to October in the northern hemisphere and continues in the southern hemisphere from Nov/Dec 2013 for the so-called winter cereals. The so-called summer cereals - mainly maize - will be harvested in the southern hemisphere (e.g. Brazil) until May/June 2014.
However, most attention is currently focused on the northern part of the world, which accounts for around ¾ of the global harvest. Two main areas of production are emerging: the expected record harvest in the US and a good average harvest in the Black Sea states of Russia, Ukraine and Canada. Both are extremely important for the harvest result and the coming price level. The outstanding priority of these two production locations results from their position as the world's largest exporters of grain, provided that the harvests are correspondingly high.
In the upcoming 2013/14 grain year, global growth of 130 to 160 million tons is expected, depending on the forecasting institute. This includes the increase in the US maize harvest of around 80 million tons. In the Black Sea region, the total harvest is estimated to be 35 million tons higher. In all other countries, the changes are "only" in the order of less than 5 million tons.
US maize cultivation, which was the focus of attention, was completed with 2% less than the originally planned area. Despite late sowing, over 66% of the crop is rated as "good" to "excellent". Less than 20 % of the areas fall in the western drought area, while in the other growing areas, ample to abundant soil moisture is observed at comparatively low temperatures. The "heat dome" predicted for the next 14 days in the mid-west of the corn belt will benefit the heat-dependent corn plant.
However, we remember last year with horror. The extended dry phase also began around the same time and lasted until mid-August. The result was a catastrophic harvest.
Wheat cultivation dominates in the Black Sea region, with maize playing a major role in Ukraine. A dry phase in May damaged wheat in the south-eastern part of Ukraine and in the southern districts of Russia and contributed to an early start to the harvest. Average conditions are still assumed for maize cultivation.
The next few weeks will provide crucial facts and information on the supply situation and price levels in the grain and feed sector for the 2013/14 marketing year.
