Welcome to The Weekly Harvest, where we recap this week’s hot topics in the crop market. Here is the recap for this week:

1. India Rabi Crop Harvest in Full Swing

The government of India recently released its second Advance Estimate of Production of Food Grains for 2020/21. Wheat production was reduced from earlier projections but remains at a record high, estimated at 109.24 MMT, up from 107.86 MMT in 2019/20. 

According to the government’s statistics, the Indian rabi crop harvest is now at 44% complete. Dryness and above-normal temperatures affected the country’s main growing regions (central and northern) over the past two months, which likely reduced yield outcomes. The Indian Meteorological Department reports the minimum temperature recorded in January was the warmest in 62 years. Anecdotal reports point to production coming in anywhere from 10% to 20% smaller. 

Reductions to government estimates on the production of food grains are expected in subsequent reports. More information will be available in the weeks ahead as harvest progresses. 

2. Pro Farmer Survey

Results from the 2021/22 Pro Farmer/Doane planting intentions survey show that stronger prices and improved farm financials are expected to bring more acres into production. This year, American farmers intend to plant a total area of 319.4 million acres, up 2.1% or 8.9 million acres from last year – the highest increase since 2018. 

Not surprisingly, the survey showed big increases in corn and soybean plantings this year, given the sharp rise in prices. Pro Farmer projects total corn and soybean plantings at a record 182.3 million acres, up 4.8% or 8.4 million acres from 2020. Total area planted to the big four crops (corn, soybeans, wheat, and cotton) are expected to increase 4.1% or 9.5 million acres from last year’s total.

      • Corn seeded area intentions are pegged at 93.4 million acres, up from 90.8 million acres in 2020.  

      • Soybean acres are estimated at 88.9 million acres, up from 83.1 million acres last season. 

      • Wheat area is forecast at 45.4 million acres, up from 44.3 million acres last year.

      • Spring wheat is forecast to decline by 5.3% to 11.6 million acres, from 12.3 million acres in 2020. 

      • Durum is projected to increase from 1.7 to 1.8 million acres.

The U.S. Department of Agriculture will release its first planting intentions estimates on March 31, and the market will be watching the results closely. U.S. stocks are tight, and there needs to be trend or trend plus yields to solve the supply and demand situation.  All three stages – planting, growing, and harvesting – need to be seamless for a successful 2021 season. 

3. Freight Rates Rise – Container Shortages Remain

During the second half of 2020, consumer buying habits turned from services to goods amid the pandemic, making demand for goods in North America and Europe surge. Approximately 90% of the goods in the global economy move by container. Shipping issues related to this demand are expected to continue through 2021, as economic recovery in the U.S. and Europe keeps consumer spending elevated. 

In recent months, ports have seen unprecedented congestion, delays, and sky-high freight prices. Some are calling the current situation a “supply chain crisis”.  Container manufacturers are trying to increase production but haven’t been able to keep up with demand. Many of these manufacturers stopped production early in 2020 as worries around the pandemic’s economic impact on world trade mounted. These delays and shortages impacted some Canadian agricultural commodities that travel mainly by container, particularly pulses and special crops.

Source: FarmLink

Information contained herein is believed to be accurate but is not guaranteed by the parties providing it. Farm At Hand, FarmLink, and their information sources assume no responsibility or liability for any action taken as a result of any information or advice contained in these reports, and any action taken is solely at the liability and responsibility of the user.

 

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