North America is enormously important as a grain producing and exporting region and a major supplier to world markets. The exception is Mexico, a large-scale importer and an important customer for Canada and the United States.
In 2020-21, according to the International Grains Council, the United States will produce a total of 432.9 million tonnes of grain, Canada 63.8 million and Mexico 36.4 million. The region’s biggest grain crop is maize, with the United States producing 368.5 million tonnes, Canada 14.3 million and Mexico 27.7 million. Forecast wheat output is put at 49.7 million tonnes for the United States, 34.1 million for Canada and 2.8 million for Mexico. Barley output is 3.6 million tonnes in the United States and 10.3 million in Canada. US production of sorghum is 9.4 million tonnes, with Mexico’s output at 4.8 million. Canada will produce 4.5 million tonnes of oats in 2020-21 and the United States 900,000. The rye crop is put at 400,000 tonnes in Canada and 300,000 in the United States.
The United States and Canada are among the world’s biggest grain exporters, with US sales on the world market in 2020-21 put at 99.1 million tonnes, while those of Canada are forecast at 30.5 million. Mexico, in contrast, is set to import 22.7 million tonnes in 2020-21. US imports of grain are forecast at 5.6 million tonnes, while Canada’s are put at 1.9 million.
The biggest single crop going to export is maize, with this year’s forecast US exports at 65.1 million tonnes, making it by far the world’s biggest maize exporter. Canada is projected to export 1.4 million. The United States is expected to import 700,000 tonnes of maize and Canada 1.6 million, while Mexico’s imports are put at 17.4 million tonnes.
The United States and Canada are both major players on the world wheat market, with US exports seen at 27.2 million tonnes and Canada’s exports at 25.2 million. Mexico’s 2020-21 wheat exports are put at 700,000 tonnes. Wheat imports are seen at 4.9 million tonnes for Mexico and 2.8 million for the United States.
Canada’s forecast barley exports are 2 million tonnes, (1.5 million feed and 500,000 malting), while those of the United States are 200,000 (100,000 feed and 100,000 malting). The United States is set to import 300,000 tonnes of barley.
The United States is by far the world’s biggest exporter of sorghum with 6.45 million tonnes forecast to be shipped in 2020-21, much of it to China, which has a massive import demand for the crop. Mexico imports sorghum at a level forecast to be 200,000 tonnes in 2020-21.
Oats are also a big export crop for the United States with 2020-21 exports forecast at 1.62 million tonnes, much of which will go to Canada, set to import 1.76 million. Mexico also imports oats, with shipments put at 130,000 tonnes in 2020-21.
The United States is, according to the IGC, the world’s largest importer of rye, taking in a projected 250,000 tonnes in 2020-21. Canada, in contrast, is second only to the European Union as a rye exporter, with predicted shipments of 120,000 tonnes in 2020-21.
US rice production is forecast at 7.2 million tonnes in 2020-21, with its exports at 3.1 million and imports at 1.1 million. Mexico will import 800,000 tonnes and Canada 500,000 tonnes.
The region is also a major producer of soybeans, with the US crop forecast at 113.5 million tonnes in 2020-21, second only to Brazil, while Canada’s output is put at 6.2 million. Canada also will produce 19.4 million tonnes of rapeseed and the United States 1.5 million.
US exports of soybeans are forecast at 58 million tonnes in 2020-21, making it second only to Brazil as a supplier of the crop. Canada is the world’s largest exporter of rapeseed, at 10.1 million tonnes. US exports of rapeseed are put at 200,000 tonnes. The United States will import 500,000 tonnes of the crop and Mexico 900,000 tonnes.
Major ethanol producer
The United States is the world’s largest user of grain for fuel ethanol by far, with the IGC forecasting that a total of 129.6 million tonnes of grain, including 128.3 million tonnes of maize and 1.1 million of sorghum, will be used for that purpose in 2020-21.
Canada is expected to process 4.3 million tonnes of grain into the fuel, 3.4 million of it maize. Even so, the IGC noted that “fuel ethanol production in the US has recovered more slowly than envisaged from the COVID-19-related downturn, curbed by subdued transportation fuel demand and poor profit margins for ethanol processing owing to high raw material costs.”
US wheat outlook
The USDA’s Economic Research Service’s November Wheat Outlook report explains that “generally, buying from South Korea, Japan, and China has been robust, but US wheat export prices have remained above key competitors in global markets since late September.”
“US wheat values continue to be supported by robust futures prices in the domestic market that have lately surged on prolonged dryness in the HRW wheat belt, among other factors,” the USDA said.
Canada expecting big yields
In a Nov. 4 update, the USDA said that in terms of quality and yield, preliminary data from the Canadian Grain Commission and Statistics Canada suggest producers had excellent growing and harvest conditions.
“Yields are forecast by FAS/Ottawa to reach 3.4 tonnes per hectare, approaching record levels,” the USDA said. “Growing conditions have been very good in most growing regions and, thus far, more than 80% of wheat and durum attained No. 1 or 2 quality grades. Dryness began in September, allowing wheat and durum to mature early and be taken off the field before frost arrived. However, fall and winter precipitation will be needed to replenish the soil and water reserves for the next crop.”
Wheat and durum have weathered the pandemic well, supported by sustained demand and resilient prices, the attaché said.
“Inputs such as fertilizer and on-farm chemicals have remained available, rail transportation has been operating in grain producers’ favor due to decreased competition from petroleum, and processing facilities have remained open without interruptions to the labor supply.
“Although still very early in 2020-21, data from the Canadian Grain Commission indicate relatively strong wheat (excluding durum) exports shipped out of Canadian ports through the week ending Oct. 11, 2020. Strong demand from China, as well as purchases from Bangladesh and Peru boosted exports in the first quarter of the trade year.”
Canada continued to be a leading supplier of wheat to China in recent months despite renewed competition, the attaché said.
“Wheat exports to China increased significantly in April 2020, and then remained strong through August 2020 (the most recently available data from Statistics Canada),” the USDA noted. “Access to transportation remained an important factor for Canadian wheat and wheat product exports. As Canada’s petroleum industry contracted due to the COVID-19 situation, competition for rail service was reduced.
“Canadian wheat, flour and wheat product exports benefited from improved access to rail transportation, and exports of these products from April through August increased 33% in volume above the three-year average. It also helped lead the country to two of the largest monthly wheat export levels ever experienced, in May and July 2020.”
Mexico plants more bread wheat
For Mexico, the attaché reported on July 10 that “farmers have recently shifted to planting more bread wheat rather than their typical durum-type wheat because of modifications to the Mexican government’s Guarantee Prices program, which grants small and medium growers a guarantee price per ton of bread wheat produced.”
“Private industry sources noted there has been a strong shift from the average of 1.2 million tonnes of cristalino (durum) wheat produced in south of Sonora and Sinaloa to now producing approximately 800,000 tonnes of cristalino and 700,000 tonnes of bread wheat during the 2019-20 fall/winter crop cycle,” the USDA said. “Before the Guarantee Price program, the average production of bread wheat was between 300,000 and 350,000 tonnes.”
The attaché pointed out that, in general, bread wheat has relatively lower yields than the cristalino variety.
“Mexico will continue to be a major importer of basic grains,” the attaché said. “In MY 2019-20, imports are expected to continue their modest growth to meet growing demand for livestock feed.”
Despite Mexico’s efforts to diversify its sources of wheat, the United States continues to be the largest supplier of wheat to Mexico, followed by Canada, the report added.
“Private analysts expect that trend to continue in MY2020-21,” the attaché said.
In addition to price considerations, which are central for mills’ purchasing decisions, other influencing factors include the protein content and homogeneity of shipments, the report said.
“Millers note that different sections of a single shipment of US wheat can have very different protein levels,” the attaché said. “On the other hand, protein levels in shipments from many other origins are more uniform.
“Mexican exports, particularly of cristalino wheat for use in pastas, are expected to decrease to 750,000 tonnes for MY 2020-21, due to the lower domestic production of this variety in states such Sonora and Baja California. Mexico’s largest markets continue to be Turkey, Venezuela and Algeria.”
Chris Lyddon is World Grain’s European correspondent. He may be contacted at: email@example.com