USDA’s forecast production levels are discussed in detailed production briefs below.
World rice production for 2002/03 is forecast at 381.2 million tons (milled basis), down 15.1 million tons from last year’s output, as India’s rice output declines a sharp 13.6 million tons due to a below average 2002 monsoon season. This year, India, the world’s second largest producer, accounted for about 80 percent of the world’s decline in rice production. China’s production has dropped from last year by 1.1 million tons to 123.2 million, accounting for about 7 percent of the decline in world rice production; China is the world’s largest producer. In Southeast Asia (Indonesia, Vietnam, Thailand, Burma, Philippines, and Cambodia), production is forecast down 1 percent to 82.2 million metric tons. For the past three years both world production and stocks have decreased while consumption has increased. Yet, world rice prices have remained virtually flat in the face of this trend, because despite lower Indian production, the country has been able to export at record levels due to their very large stocks.
India 2002/03 cotton production is forecast at 10.9 million bales, up 0.2 million or 2 percent from last month as rains in September improved moisture availability for the standing cotton crop, but is down 1.4 million or 11 percent from last year. The late revival of the southwest monsoon resulted in good rains from the end of August through mid-September in most cotton growing areas (except some pockets in the south), providing relief to the drought-stressed crop. The crop continues to progress well under generally favorable conditions due to improved soil moisture availability. However, late rains have resulted in a 3 to 4 week delay in crop maturity and expected market arrivals. A clearer picture will emerge by early December when picking accelerates in most growing areas. India’s other crops did not benefit from this rainfall.
Soybean production in Canada is forecast to be 2.35 million tons in 2002/03, down 0.25 million from last month, but up 44 percent from last year’s drought reduced 1.63 million tons. The estimate is based on Statistics Canada’s September estimate of 2.26 million tons, which is for Quebec and Ontario. It is estimated that an additional 0.9 million tons will be produced in Manitoba. Soybean area in Manitoba has increased in recent years, because of the use of new varieties that are well suited to the relatively short growing season. National yield is expected to be 2.30 tons per hectare, which is below the 5-year average of 2.60 tons, because of hot and dry conditions in Ontario. Total harvested area is estimated at 1.02 million hectares, down from 1.07 million harvested last year.
The 2002/03 Australian wheat crop is forecast at 13.0 million tons, down 2.0 million or 13 percent from last month and down 11.0 million or 46 percent from last year. Area is forecast at 10.8 million hectares, unchanged from last month but down 1.7 million or 13 percent from last year. Production is revised down due to lack of rainfall during September when the crop was progressing through the flowering stage. Wheat growing areas of Queensland (QLD), New South Wales (NSW), Victoria (VIC), and South Australia (SA) have lost significant yield potential. During the 1994/95 season, Australia experienced a severe drought that resulted in an exceptionally low wheat output of 8.9 million tons. This season wheat areas of NSW, VIC, SA, and WA received 40 to 60 percent of normal precipitation for the period June 1 to September 30.
Russian wheat production for 2002/03 is estimated at 49.0 million tons, up 1.0 million or 2 percent from last month and up 2.1 million or 4 percent from last year. Barley production is estimated at 18.5 million tons, up 1.0 million or 6 percent from last month but down 1.0 million or 5 percent from last year. The harvest campaign in Russia’s spring wheat region has benefited from excellent weather. In Western Siberia, cool, wet weather during the growing season boosted yield potential but delayed crop development. Dry weather in September and early October extended the harvest season and enabled farmers to gather a large portion of the standing crop. The overall grain harvest was over 90 percent complete as of October 5.
Corn production for 2002/03 is estimated at 3.5 million tons, up 0.5 million or 17 percent from last month, but down 0.1 million or 3 percent from last year. According to a report from the U.S. agricultural attaché in Kiev, yields were reported up by as much as 30 percent in some production areas during the early stages of harvest, and yields of 3.3 to 3.7 tons per hectare were reported for central Ukraine. Central Ukraine grows roughly one-third of the crop. Corn harvest typically continues throughout October.
China’s 2002/03 peanut production is estimated at 14.5 million tons, down 0.25 million or 2 percent from last month, but up slightly from last year’s bumper crop of 14.4 million tons. Estimated area is unchanged this month at a record 5.0 million hectares, but estimated yield was revised downward to 2.9 tons per hectare in response to unfavorable weather in several key peanut-growing provinces this summer. Shandong Province saw drought problems, and excessive rainfall and typhoon damage occurred in parts of Guangxi and Guangdong provinces. The revised yield is lower than the record of 2.97 tons per hectare set in 2000/01, but still higher than the 5-year average.
Relative prices prior to planting favor sunflowerseed, but soybean expansion is expected to remain strong.
As a result of the favorable relative prices, sunflowerseed harvested area is expected to increase this season to 2.30 million hectares, up from 1.98 million last year and 1.89 million two years ago. Higher relative prices may explain the large increases that have already occurred in sunflower plantings in the northern provinces of Chaco and Santiago del Estero, where planted areas are reportedly up 119 and 284 percent, respectively. Planting in the northern provinces has been completed and is now beginning in the main sunflower areas of Buenos Aires, La Pampa, and Cordoba provinces.
Despite price signals being neutral between soybeans and corn, harvested area for soybeans is forecast to increase 6 percent to 12.0 million hectares, while corn is forecast to decline 8 percent to 2.25 million. Farmers are expected to plant more soybeans because they are a lower input-cost crop than corn, an important deciding factor this year when farmers’ access to credit is restricted due to Argentina’s economic collapse.
The sunflowerseed/soybean price ratio in July when Argentine farmers were preparing for the 2002/03 planting season was higher this year at 1.14, above 0.97 last year and 0.86 prior to the 2000/01 campaign, using FOB Argentina prices. Meanwhile, the soybean/corn price ratio was fairly neutral at 2.10. This is about the same as last year’s 2.14, but down slightly from 2.24 prior to the 2000/01 planting season.
Absolute prices in July
were favorable for all three crops. FOB
prices in dollar terms were up 10 percent for corn, 9 percent for soybeans and
27 percent for sunflowerseed relative to July 2001. With the exchange rate shift, prices in pesos are up 314
percent for corn, 307 percent for soybeans, and 378 percent for sunflowerseed.
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