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16/03/10
The Chinese wheat production in 2010/11 is estimated at 114mmt, vs. 114.5mmt in 2009/10. Nothing out of
the ordinary has occurred this winter across Chinese wheat areas; temps were low in central China in Jan and
Feb, and snow cover was adequate. Temps have since warmed and the crop will soon exit dormancy amid
abundant soil moisture as the pattern has shifted to wetter in recent weeks. Spring wheat areas plantings are
not threatened with an abundant amount of moisture. When analysing production, trend‐line yields are
assumed. China’s wheat yield has increased steadily in the past decade, with trend yield now at 4.85 mt/ha.
With production forecasted at 114mmt, and 09/10 ending stocks would produce total supply of 175.3 mmt, up
11.8 mmt from the previous year.
China Wheat Production & Yeild
Chinese wheat exports are estimated at 2
140,000
mmt compared to 1 mmt in 2009. China will 6.00
potential.
Production (K mt)
80,000
Yield (t/Ha)
60,000
sustained at higher international levels with
40,000
cheaper Russian and French wheat available. 2.00
a theme projected in 2010/11.
0 0.00
80/81
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07/08
08/09
09/10
10/11
Figure 1
Chinese ending stocks last year are projected at an eight‐year high 60.8 mmt. Stocks in 2010/11 assuming
normal weather and near‐record demand is estimated at 67.3 mmt, and increase of 6.5 mmt.
There seems to be no shortage of wheat in China and certainly no imports are expected except from high quality
millers in close proximity to China.
In the past decade China has consistently purchased wheat from domestic producers to stockpile into reserves.
China has kept stock/use ratio of other grains at 30‐40%, which has kept prices at acceptable levels for both
producers/consumers. Wheat may be released from China’s reserves amid considerably large stocks/use ratios
with any exports being feed wheat. Amid all this wheat, China has no reason to import other feed grade
commodities.
One area of concern in the past week that has surfaced is Ukraine. On Monday, Interfax Ukraine news agency
reported that frost and ice have killed 1.6 percent of Ukrainian winter grain area as of March 11 compared to
0.3 percent a week earlier. The data also showed the area under ice crush rose to 9.1 percent from 7.2
percent. All told, the agency said about 13.5 percent of the winter grain area, or 1.1 million hectares, were in
poor state as of March 11 vs. 10.3 percent in late February. For perspective, ice on Ukrainian fields killed about
one million hectares of winter crops in the 2007/08 crop year, causing a decrease in wheat production to
13.7mmt. In contrast, output the past two years was 25.9 and 20.9mmt, respectively.
ATA Notes: In years of ample supply, Ukraine has proven to be an aggressive exporter. For example, on the
heels of the short crop in 2007/08, exports only totaled 1.2mmt. That number soared to 13.0 last year,
however, and is forecast to be 9.0 in 09/10. A poor crop in 10/11 may nudge open the export window for the
U.S. and Australia ever so slightly. We will be monitoring crop prospects closely this spring.
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