EAGC participated in the Spring Crop and Market Update webinar that gave a status update on the U.S. Hard Red Spring Wheat and the alarming rate at which world supplies are tightening.

In 2021, drought affected a larger portion of the production region, where yields were significantly impacted and not all crop was harvested, with production declining by 45% . The outlook in 2022 shows a planting season due to colder than normal temperatures and recent snowfall. Prospective Plantings report indicate that farmers are willing to plant 2% less spring wheat compared to 2021 given the increase in prices for all commodities, coupled with the increase in price for fertilizers. Crops with projected lower acreage include soybean, barley, sunflower, peas/lentils higher and corn projected lower with soybeans, peas being the most preferred due to less nitrogen consumption.

Supply levels have therefore tightened after drought impacted 2021 crop production. Indication also show that spring wheat acres could be down, with the uncertainty of the recent weather impacting planting timeline and may or may not affect wheat acres. On the other hand, prices continue to be volatile due to supply concerns, and the uncertainty over weather and Russia/Ukraine situation.

The supplies of several crops are tightening. In 2021, drought crushes in the U.S. northern plains and pacific Northwest caused small grains production of spring wheat, white wheat, durum, and barley, while in Canada, drought caused crushes in spring wheat, durum and canola production and in Brazil second crop corn production. In Russia, dry weather trimmed Russia spring wheat crop while wet conditions in western Europe hurt quality. There was a record wheat crop in Australia but heavy rains during harvest on east side reduced quality and cause logistics constraints. There was a big wheat crop in Argentina but the GMO type.

In 2022, South American “La Nina” drought cut soybean production 30 to 35 MMT’s, while Brazil Safrinha corn crop is now threatened by dry conditions, and likely to be smaller than early estimates. Rush to Crush has also caused rise in biodiesel demand as vegetable oil supplies drop. Russia invaded Ukraine cutting Ukraine corn exports and the Russia/Ukraine combined export of 60% of world sunflower oil and Russia/Ukraine export of 30% of world wheat. This therefore shows that world exportable wheat and corn supplies are super tight and with the N. Africa drought, Egypt is likely to turn to India for corn and wheat imports.