2014 Wheat Situation. Crop Outlook & Durum Forum November 2014

Transcription

1 2014 Wheat Situation Crop Outlook & Durum Forum November 2014

2 World Wheat 2014 Impact Issues RECORD CROP BUT SHORTAGE OF QUALITY BIG U.S. CORN CROP No shortage of sellers on world wheat market Inland rail freight issues in U.S. and Canada are impacting export values of higher quality wheat Key factors moving forward: Ukraine / Russia situation Adjustment of traditional HRS export customers to 2014 crop profile U.S. and Canadian rail congestion and rates Southern Hemisphere wheat harvest Early growth and moisture for 2015 crops (U.S. and Russia)

3 Est Proj WORLD WHEAT PRODUCTION/ USE Million Ton Production Use Million Bushel , , , , , , , ,696 USDA

4 WORLD WHEAT PRODUCTION (Million Bushels) 999 Canada EU FSU Proj U.S Proj Proj India Proj Proj China Proj Australia USDA November 2014 Argentina Proj Proj 14-15

5 WORLD WHEAT TRADE Million Ton Traditional Exporters Other Exporters Billion Bushel *5 Traditional Exporters include: U.S., EU-27, Canada, Australia and Argentina 10/11/14

6 WHEAT EXPORTS Major Exporters Million Bushels Est Proj ,414 1, EU-27 FSU-12 U.S. Canada Australia Argentina Source: USDA November

7 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Est. WORLD WHEAT STOCKS Million Tons Traditional Exporters Million Bushel 9,185 7, , ,674 1,837 0 *5 include: U.S., EU-27, Canada, Australia and Argentina

8 US WHEAT PRODUCTION REGIONS / CLASSES Durum Durum Hard Red Winter Hard Red Spring Soft White Hard White Soft Red Winter Durum

9 U.S. WHEAT SUPPLY & DEMAND Million Bushels Proj Change Beg Stocks % Production 2,207 1,999 2,262 2,135 2,026-5% Imports % Tot Supply 3,279 2,974 3,131 3,021 2,786-7% Dom Use 1,128 1,181 1,401 1,256 1,216-3% Exports 1,289 1,050 1,012 1, % Tot Use 2,417 2,231 2,414 2,432 2,141-12% End Stocks % S/U Ratio 36% 33% 30% 24% 31% Source: USDA November 2014

10 U.S. WHEAT PLANTINGS & PRODUCTION Acres/Bushels Million Acres Planted Harvested Production Million Bushels Source: USDA Small Grain Summary

11 Average U.S. Wheat Yields Bushels Per Acre Spring Winter All Wheat Metric Tons Per Hectare Source: USDA Small Grains Summary September 2014

12 U.S. WHEAT SUPPLY BY CLASS Million Bushels Million Tons 1600 Production Begin Stocks

13 U.S. WHEAT ENDING STOCKS BY CLASS Million Bushels Million Tons Est Proj HRW HRS SRW 0.0

14 12-Jan Apr July Oct 13-Jan Apr Jul Oct 14-Jan Apr Jul Oct $ per Bushel $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 U. S. FUTURES TRENDS Minneapolis Hard Red Spring Kansas City Hard Red Winter Chicago Soft Red Winter World prices MGE KCBOT CBOT $ per Ton $367 $331 $294 $257 $220 $184 $4.00 $147

15 Jun-11 Sept Dec Mar Jun-12 Sept Dec Mar Jun-13 Sept Dec Mar Jun-14 Sept PRICE TRENDS AT THE PNW Per Metric Ton $600 $500 DNS 14% HRW 12% Per Bushel $16.32 $13.60 $400 $10.88 $300 $8.16 $200 $5.44 $100 $2.72 Source: USDA, Annual Price Summary 10/10/14

16 U.S. WHEAT EXPORT PRICES Pacific Northwest Ports $ per Ton $ per Bushel $400 $ Oct 13 Oct 14 $ $ $ $ $250 $6.80 $200 $5.44 $150 $4.08 $100 DNS 14% HRW 12% White Wheat 11/14 $2.72

17 EXPORT PACE FOR U.S. WHEAT (Shipments and Sales as of October 31, 2014) Million Bushels Pace Pace Million Tons HRW SRW HRS WHITE /06/2014

18 EXPORTS OF U.S. WHEAT (Year-to-Year comparison by country Oct. 31) Million Bushels Pace Pace Million Tons /06/2014

19 U.S. Hard Red Spring Wheat Typical Production Share by State Montana (21%) North Dakota (50%) South Dakota (10%)

20 U.S. HARD RED SPRING 2014 Overview High yielding crop and increased acres -- 14% larger production than Planting / Emergence Delayed start due to longer and colder than normal winter and pace was slower than normal. Some planting into June. Growing Season Ample moisture and cool temperatures favored high plant populations and boosted yield potential early. Some areas faced increased disease pressures during flowering but most areas faced little stress. Drought in PNW impacted yields there. Harvest Began later than normal and progress remained slower than normal in most areas due to delayed crop ripening and periods of rain. Very heavy rains in western areas during late August and September impacted some crop quality parameters.

21 U.S. HRS Planting Progress Percent yr. avg

22 Million Acres U.S. SPRING WHEAT PLANTINGS & PRODUCTION Million Bushels Planted Harvested Production * Typically includes million bushels of white spring wheat. Source: USDA Small Grain Summary

23 U.S. SPRING WHEAT PRODUCTION BY STATE Million Tons Million Bushels North Dakota Montana South Dakota Minnesota 0 Source: USDA Small Grain Summary

24 U.S. HRS Harvest Progress Percent yr. avg Aug 24-Aug 31-Aug 7-Sep 14-Sep 21-Sep 28-Sep

25 U.S. HARD RED SPRING 2014 Quality Summary: Overall High grade profile with 86% of crop achieving #1 grade. Below average for protein with especially lower color or vitreous kernel counts. Some areas are showing lower falling number values and others are showing higher DON. Crop performance Similar dough strength to last year. Absorption is below last year and five-year average. Bake quality is good with slightly lower loaf volumes. Data is based on collection of 784 producer samples. Analysis by North Dakota State University, Plant Sciences Department, Hard Red Spring Wheat Quality Lab

26 HRS Crop Areas A B E A C B D A B A C D E F B A B C

27 2014 HRS: Grade Distribution 3% 7% % 7% 86% 94%

28 HRS: Test Weight yr avg is Pounds/bushel

29 2014 HRS: Test Weight Distribution Lb/bu 1% <57 7% % 4% % 18% % 31% % 63%

30 HRS: 2014 Test Weight by State (lb/bu)

31 HRS: Total Defects yr avg is Shrunken & Broken Damage Foreign Material Percent

32 HRS: 2014 DON by State (ppm)

33 HRS: Vitreous Kernel Content yr avg is 73% % 70% 82% 75% 68% %

34 Percent 2014 HRS: Vitreous Kernel Distribution % 19% 6% 20% 18% 27% 43% 59%

35 2014 HRS Vitreous Kernels (%)

36 HRS: Protein Content (12% moisture basis yr avg is 13.9% % % % 14.6% % 13.6% Percent

37 2014 HRS: Protein Distribution Percent % 12% 21% 17% 26% 30% 28% 25% 16% 15%

38 HRS: 2014 Protein Content by State (12% moisture basis)

39 2014 HRS Protein by Region (%) (12%m.b.)

40 HRS: Moisture Content yr avg is 12.2% % 12.6% 11.8% 11.8% 12.2% 12.7% Percent

41 HRS: Falling Number yr avg is 390 seconds Seconds

42 2014 HRS: Falling Number Distribution Seconds % 3% 4% 16% 23% 45% 28% 71%

43 2014 HRS Falling Number (Seconds)

44 U.S. HRS: Dough Quality Farinograph Results Minutes PEAK MIX TOL (minutes) Peak Mix Tolerance

45 HRS: Farinogram Absorption yr avg is 62.5% % % % % Percent

46 HRS: 2014 Farinogram Absorption by State (percent)

47 HRS: Loaf Volume yr avg is 959 cc Cubic Centimeters

48 HRS: 2014 Loaf Volume by State (cubic cm)

49 Proj Million Tons 10 U.S. HRS USAGE (Domestic / Export) Export Domestic use Million Bushels Source: USDA Nov 2014

50 Protein Content COMPARATIVE U.S. WHEAT PROTEIN LEVELS 12% Moisture Basis 16 HRS Wheat 5 Yr Avg HRW Wheat Five Yr Avg

51 Protein Content COMPARATIVE PROTEIN U.S. & CAN SPRINGS 12% Moisture Basis 15.5 U.S. HRS 5 Yr Avg CWRS Five Yr Avg /8/14

52 Protein Prices Export Market Avg. $ per Ton $ per Bushel Oct 13 Oct 14 $400 $350 $ $10.88 $9.52 $8.16 $250 $200 $150 $100 NS/DNS 13% NS/DNS 13.5% NS/DNS 14% 11/06/14 $6.80 $5.44 $4.08 $2.72

53 U.S. HRS Production Region / Export Path 72% 7% 1-2% 18%

54 EXPORT TRENDS BY REGION U.S. Hard Red Spring Wheat Million Bushels /10 10/11 11/12 12/13 13/14 Million Tons Europe Africa/Mid East West Hemisphere Asia 0

55 U.S. HRS EXPORT PACE As of October 31, 2013 and 2014 Million Tons Million Bushels Total Europe Asia Africa Latin America 0 11/06/14

56 HRS YEAR-TO-YEAR PRICE CHANGE 14% Protein Level $ per Ton $ per Bushel Oct 13 Oct 14 $400 $ $ $9.52 $300 $8.16 $ $6.80 $ $5.44 $150 GULF Export PNW Export US Producer $4.08

57 U.S. HRS SUPPLY & DEMAND Million Bushels Proj Change Beg Stocks % Production % Imports % Tot Supply % Dom Use % Exports % Tot Use % End Stocks % S/U Ratio 29% 32% 31% 30% 37% Source: USDA November 2014

58 North Dakota Rail Traffic Trends Thousand MT s 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Grain production, by weight, has increased about 47% compared to the early 1990s. Oil production shipped by rail, by weight, has increased about 350% compared to Grain Oil Source: USDA & EIA

59 Dollars per Car Tariff Rate Trends, Wheat $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 Pacific Northwest (Portland) Approximately 100 Metric Ton per car Single Unit Shuttle Source: BNSF Published Tariff

60 Jan-12 Mar May July Sept Nov Jan-13 Mar May Jul Sept Nov Jan-14 Mar May July Sept HRS PRICE IMPACTS DUE TO HIGHER RAIL FREIGHT Per Metric Ton Per Bushel $450 $400 Export Producer $12.25 $10.89 $350 $9.52 $300 $250 $200 $150 Additional rail cost $8.16 $6.80 $5.44 $4.08 Source: US Wheat & USDA

61 2014 U.S. HRS Summary Big production will keep local supply pressures greater than normal but slow producer selling at current prices Strong early season demand from traditional export customers but has slowed with some below average parameters in 2014 crop -- Does Canada have much different to offer? Inland rail costs and service delays are keeping export and domestic customer values higher than 2013 while producer prices remain depressed. Will situation ease? Strong domestic mill demand due to attractive values for lower protein segment of crop Overall quality remains quite competitive on world market due to quality issues in record world crop but may take time for demand to develop from non-traditional customers.

62 THANK YOU QUESTIONS? Jim Peterson Marketing Director ND Wheat Commission

63 12-Jan May Sept 13-Jan May Sept 14-Jan May Sept U.S. AVERAGE FARM PRICES Per Ton $400 $350 $300 $250 $200 $150 Durum Spring Per Bushel $10.88 $9.52 $8.16 $6.80 $5.44 $4.08 $100 $2.72 Source: USDA, Annual Price Summary 10/31/2014