Maria Cappuccio 


In the latest economic assessment of the global economy, global growth is expected to receive a boost from lower oil prices although other negative factors, including investment weakness and diminished prospects for medium-term growth in many advanced and emerging market economies, led the IMF to revise the global growth forecast down to 3.5% and 3.7% in 2015/16, reflecting a reassessment of prospects in China, Russia, Japan and the euro

area, as well as weaker activity in some major oil exporters because of the sharp drop in oil prices. The US was the only major economy for which growth projections were raised. US employment data released in March confirmed a further rise in the number of jobs, which helped send the dollar to a 12-year-high, expected to prompt the US Federal Reserve to begin raising key short-term interest rates later in the year, at precisely the same time as China and other central banks around the world, cut interest rates and loosen credit, with the European Central Bank (ECB) set to launch a E1.1 trillion quantitative-easing (QE) package to stimulate growth in the euro area.

In agricultural commodity markets improving supply prospects for 2015/16, following back-to-back record global production for corn, wheat and soybeans in 2013 and 2014, contributed to stock rebuilding, lowering concerns about price volatility, and softening export demand; while record-high grain and oilseed stocks have pressured weak wheat, corn and soybean prices.


The global wheat area increased by 1% to 224m/ha, with most of the winter wheat in the Northern Hemisphere, developing or soon to break-dormancy and spring plantings under way in some countries; prospects for 2015/16 remain mostly favourable despite 

problems in Russia, and dryness in the US Southern Plains Hard Red Winter wheat-growing region and parts of Far East Asia — assuming average yields and normal growing conditions for the rest of the season, an increase in the supply of high-quality milling wheat is expected despite an overall decline in world wheat production — the UN’s Food and Agricultural Organization (FAO) forecasts the global wheat harvest at 720mt (million tonnes) in 2015, higher than other estimates including the IGC at 710mt and only slightly below the record output in 2014, reflecting an expected decline in the EU and CIS countries.


The USDA estimates the US wheat area at 55.5m/acres,1.3m/acres below last year and, based on average yields and reduced abandonment, forecasts a crop at 56mt in 2015 slightly below the FAO estimate of 58mt. Production of HRW (hard red winter wheat),WW (whole white) wheat and durum-are set to rise as price premiums provide a strong incentive for producers, at the expense of SRW (soft red winter) wheat and other spring crops. While Canadian wheat production is also tipped to rise to 30mt including over a 10m/acre increase in spring wheat plantings, that more than offset a sharp fall of 33% in Canada’s winter wheat sowings, due to a late harvest and other delays. Despite a rise in Canada’s sowings and a drop in domestic demand, wheat stocks at the end of 2015/16 are expected to shrink to 4.8mt, a near record low. Agriculture & Agri-Food Canada (AAFC) forecasts a small rise in Canadian wheat prices to C$210-240/t (U$166-U$190/t) next season, reflecting smaller supplies and a weaker Canadian dollar.


The EU soft wheat planted area is expected to fall by 0.2m/ha to 24m/ha due to heavy rain that hampered sowings in Bulgaria, Hungary, Croatia, and to a lesser extent in Italy. For the rest of the EU growing conditions were mostly favourable, despite some dryness in eastern EU countries, assuming yields return to average after last year’s exceptional highs, FAO forecasts production to be lower at 147mt; Strategie Grains forecasts a crop of 148mt-including durum wheat to rise to 7.9mt while output in both the UK and Germany, is cut by 2mt. By contrast Abares forecasts the EU crop to slump to 143mt.

Although an expansion in the total area planted (including the spring crop) is forecast, wheat production in Russia is expected to decline to 55mt — cold weather and severe frost has reportedly affected nearly one-fifth of the winter crops and yields are expected to decrease from the high level of last year. In Ukraine crop conditions are better having received adequate snow cover during the winter months, although preliminary estimates point to a drop in production to 22mt; wheat output is expected to increase for Kazakhstan up to 13.5mt and Uzbekistan 7.5mt. While soil and moisture conditions for spring- sown plantings are likely to be better-although sharply depreciating currencies, tight financing conditions and higher cost of inputs, in both Russia and Ukraine may temper growers’ appetite for spring-sown crops that have lower yield potential.

China’s Ministry of Agriculture forecasts the winter wheat sown 

area at 22m/ha slightly higher than last season, while other sources forecast a small reduction, due to an unchanged minimum purchase price yuan 2360/t ($376.85/t) and environmental pressures (urbanization and water shortages). China’s crops are making good progress due to ample rainfall at planting followed by bouts of rain and snow in winter — the FAO forecasts the crop at 126mt similar to last year. An increase in India’s minimum support price for wheat, coupled with favourable growing conditions (sufficient supplies of irrigated water and fertilizers, and average yields), is expected to increase output to 94.5mt, slightly below last year. The wheat crop in Pakistan, due to better yields is expected to rise to over 25mt.

Conditions for Australia’s wheat plantings, due to take place from mid-April through June appear reasonable with cooler temperatures and decent precipitation in Eastern Australia and slight dryness inWesternAustralia;Abares expects the area planted to wheat to remain steady, with increased yields in eastern Australia likely to push national production up to 24.4mt. Argentina’s 2015 wheat plantings are forecast lower in response to falling prices.


Assuming broadly unchanged consumption levels, global wheat stocks are expected to rise to 203mt by the end of 2015/16. USDA forecasts the US wheat farm price to average $5.10/bu ($187.39/t), a decline of 15% from the current year; Rabobank forecasts futures averaging $5.60/bu ($203.76) in the October to December quarter 2015 — well above the December contract close at $5.105/bu ($185.75/t-6 Mar’15); while Abares tips global wheat price to fall by $5/t averaging US$265/t.


Further upward revision to global wheat output, forecast at a record 725mt in 2014/15, well above initial estimates, and outpacing demand forecast to rise to 715mt. Greater uptake of wheat for feed use to rise, by over 9mt to 140mt, predominantly in the EU, CIS and China, with a small increase for global food/industrial use up by over 1mt to 575mt.

US wheat exports-handicapped by a strong dollar and uncompetitive freight for most of the season, were given a much-needed boost following the introduction of a U$100m credit line for Egypt that helped secure sales in February totalling 290,000/t of US HRW wheat at an average price of 

$273/t CIF (cost, insurance, freight). The General Authority for Supply Commodities (GASC) confirmed that Egypt — the world’s largest single buyer — bought five cargoes of wheat from Cargill Inc., Groupe InVivo, Louis Dreyfus Corp. and Ameropa AG. Since the marketing year began in July 2014; prior to the credit line, GASC bought only one 55,000/t cargo of US wheat, compared with almost 2mt of French, over a 1mt of Romanian and additional supplies of Black Sea grain.


Global wheat trade is forecast at 160mt in 2014/15, only 2mt lower than last year, due to better harvests. CIS exports are forecast at almost 38mt (Russia 20mt, Ukraine 11mt, Kazakhstan 6mt) slightly more than the previous season. Informal curbs on Russian exports were apparent, before the government levied a 15% tax ($39/t) on all Russian grain exports from 1 February until the end June 2015, to quell rising domestic wheat prices prompted by a further slide in the rouble. Since the beginning of 2014, the Russian rouble has lost some 50% of its value while Ukraine’s hryvnia 70%, with food price inflation up by almost 21% in Russia and over 30% in Ukraine, increasing the risk of increased trade-protection to keep food prices from rising further. Fewer exports from the Black Sea, and a weak euro, improved EU wheat prospects, prompting a surge of sales to Algeria, Egypt and North Africa — with feed wheat offers at $200/t — beating competition from India and boosting exports up by a 1mt, to over 31mt this season, making the EU the most competitive supplier to the Middle East.


Export quotations of wheat declined significantly in February and March, as ample world supplies continued to weigh on international prices. Further improvements in supply prospects for 2015/16 also added to the downward pressure. A strong US dollar had negative impact on sales from the US contributing to the decline in export prices. In the absence of a significant weather development global wheat prices are expected to remain pressured. Global wheat stocks are expected to reach 203mt by the end of 2015/16 marketing year, reflecting further stock accumulations in the EU, China, India and the Russian Federation. US HRW wheat average prices FOB (free on board) are down by over $78/t to $238/t (5 March) year-on-year. Revived concerns for the CIS crops and frost damage to US winter wheat briefly revived futures, before falling back again. Wheat May contract at the CBOT, closed at $4.8225/bu ($177/t — 6 March 2015). Paris wheat May contract closed at E184.50/t ($210/t — 8 March 2015) helped by the continued strength in EU wheat exports; while London wheat for May closed £117.75/t ($177/t — 8 March 2015).


USDA projected US corn plantings to fall by 1.6m/acres to 89m/acres surprised markets anticipating a larger fall in acreage and, based on trend yields of 166.8bu/acre, US production is forecast at 13,595M/bu (345mt) 16mt below last year’s record. In the Ukraine corn production is expected to fall by 20% and also in Russia — affected by high interest and input costs for seed, expensive fertilizer and chemicals, with growers expected to plant other crops like wheat, barley and sunflowers. Abares forecasts the global corn crop in 2015/16 at 965mt below this year’s 991mt crop but higher than the IGC’s preliminary forecast. This includes a smaller US crop of 345mt, in line with the USDA estimate, and a smaller EU corn harvest at 65mt. A 

rise in corn prices is expected, as measured at Gulf ports to $193/t in 2015/16 — equivalent to $4.90/bu — reflecting an increase in demand for corn and a reduction in record output achieved in 2014/15. While Abares saw improvement for corn and barley, less so for wheat with soybeans expected to hit a nine year low.

Corn prices, pressured by large US and global supplies, saw new crop futures during the first half of February average $4.15/bu, down $1.57/bu from two years ago; while bids for 2015 fall delivery at Central Illinois elevators $3.78/bu are down $0.47/bu from last year-lower prices reducing growers’ returns. With corn and soybeans strong competitors for acreage in US spring planting programmes any movement/shift in the soybean/corn ratio in coming weeks to determine how much of each crop farmers will sow.


Despite lower prices at the start of the year, global output of coarse grains 1.275Bn/t is just shy of last year’s record, due to a huge corn crop in 2014. Abundant supplies and lower prices are expected to increase consumption up by 24mt to 1.265Bn/t mostly driven by feed up by almost 27mt to 763mt, with a small contraction for food/industrial use down to 502mt. Global coarse grain trade is expected to fall by 9mt to 155mt due to better harvests, smaller imports into China and the EU, while global stocks forecast to rise to 219mt, a level not seen for 15 years. 


Global corn production is expected to rise to a record 990mt lifted by a huge 361mt US corn crop, and better crops in the EU 74mt, offset by slightly smaller crops in China 216mt, Brazil 75mt, Argentina 24mt, and Ukraine 28mt. Growing consumption is pegged at a record 977mt with feed use expected to grow by 24mt to 597mt. In the US, this growth is set to be by over 5mt to 135mt; China up by 4mt to 158mt; Mexico 2mt to 34mt; and in countries like South Korea, more corn and less feed wheat. Food and industry use is expected to contract slightly to 379mt. Average export prices for US Corn 3YC have fallen year-on-year from $233 to $178 Fob (Mar 5 ‘15).


USDA project corn use for ethanol at 5,225M/bu (132.7mt) for 2015/16, down 25M/bu (0.6mt) although reflecting steady fuel demand through 2015. Ethanol blending rates continue to be effectively limited to 10% due to constraints in distribution and use of higher blends. While lower fuel prices have increased fuel use, the Energy Information Administration (EIA) forecasts a slight reduction in domestic fuel consumption for 2015/16, reflecting increased vehicle efficiency and rising fuel prices. Production of ethanol reached a record 14.3Bn gallons in 2014/15, using over 133mt of corn and producing 39mt of  

livestock feed (35mt Distillers Dried Grains and Solubles [DDGS] 4mt corn glutenfeed/meal). US exports of ethanol rose to 825M/gallons, as did exports of 11mt of DDGS, a valuable feed co-product; over 5mt of DDGS is exported to China. In 2013, shipments of US corn to China were rejected following the discovery that they contained the gene strain (MIR162) not approved in China, which disrupted the trade in corn and was also extended to corn products, like DDGS. In December 2014, the Chinese authorities approved the gene strain (MIR 162) clearing the way for US exports to resume.


China’s corn production is expected to fall by 3mt to 215mt in 2014/15 as dryness in some of the key producing regions (Henan, Hebei, Shandong, Liaoning, Shanxi and Inner Mongolia), which account for around 40% of total corn production, led to lower yields. Despite lower corn output, imports are revised down to 2.5mt — given record-high domestic stocks — which USDA forecasts are higher than official estimates and close to 100mt. Corn production continues to be supported by the government this year. Plantings are expected to be similar to last year, beginning in southern regions in March and in the north in April. On the Dalian exchange, the September corn contract traded stood at yuan 2536/t ($405/t-10.09-Mar 9’15).

Global corn stocks are expected to rise to 190mt in 2014/15, aside from the large build-up of Chinese stocks, US stocks are forecast to rise to 46mt. Average export prices for Corn (yc3), are 178/t FOB (9 March) some $55/t lower than last year. Corn futures have recovered slightly since the beginning of February, CBOT May corn closed at $3.898/bu (9 March) well-below last year.


Barley output fell to 141mt in 2014/15, smaller acreage and harvests in Argentina, Australia, Canada,Turkey and Morocco, partially offset by better crops in Russia 20mt and Ukraine 9mt. Barley use is expected to increase by 1mt to 141mt (slightly lower feed 96mt offset by increase in Food/industry use of 46mt). Withbetterdomesticcropsandcornmorecompetitive, trade is forecast slightly lower at 23.6mt; mainly due to reduced imports to Saudi Arabia 6.5mt almost offset by an increase in China’s imports to 6mt. The Australian barley market picked up 2mt sales of barley to the Chinese market, with feed millers often paying a premium of ($10–15/t) above the Saudi market, when US corn and corn products (DDGS, corn gluten feed/meal) were banned. While the majority of imported feed barley is for animal feed, a small amount is also used by the brewing industry for lower-quality malting products. Global barley stocks are forecast lower at 24mt in 2014/15 — smaller supplies and strong demand have supported international prices — UK feed barley ex-farm £105–115 ($158–174 5 March 2015); EU barley prices (France) FOB Rouen have strengthened over the week to $198/t (5 March 2015) albeit some $55/t lower than last year. Paris Futures malting barley May contract closed at E221/t ($240/t) (Mar 9’15).


Production of sorghum increased by 2mt to 62mt in 2014/15 helped by a bumper harvest in the US and Sudan, partially offsetting lower crops in Mexico, Nigeria and India. Meanwhile, consumption — mainly feed — rose by 3mt to 63mt; trade is forecast at a record 10mt, with rising Chinese imports up by 3mt to 7mt — due to increased feed and liquor production —  China now purchases the majority of US sorghum (7mt), significant amounts of barley (6mt) and a large quantity of US DDGS used mostly as a feed, and expected to continue. In 2014/15, China is expected to import a combined total of sorghum and barley over 13mt — international prices of sorghum reflect strong demand relative to corn-sorghum export price FOB April-Nola $254.32/t (6 March 2015).

With soybean prices much lower than last year, USDA forecasts soybean (planted) acreage to be marginally lower at 83.5m/acres in 2015/16 (contested by many analysts) and with typical yields would imply another record US soybean crop of 103mt (3.8Bn/bu). Abares forecasts global soybean prices, measured at Gulf ports, to fall by $33/t to $390/t in 2015/16, reflecting large global soybean stocks rising from 89mt to a record 102mt at the end of 2015/16; with stocks expected to rise in all three major exporting countries, Argentina, Brazil and the US.


Global oilseed output is expected to reach 532mt boosted by record soybean output, in nearly all of the major exporting countries, either already harvested, or forecast for harvest in early 2015, lifting production to 315mt. Smaller increases are expected for other crops including rapeseed 71mt and palm kernel 16mt, and slightly lower crops for cottonseed 45mt, sunflowerseed 40mt, groundnut 39mt and copra 6mt. Abundant soybean supplies are expected to increase negative pressure on weak soybean prices, exacerbated if producers harvest large crops next year. Global crushings, are expected to rise by 14mt to 432mt. There will be increases in a number of countries, especially China and Argentina, as lower prices improve crush margins supported by strong demand led by feed in a number of countries, with meal use up to 284mt. While global oilseed trade is forecast up to 137mt, global oilseed stocks at the end of 2014/15 are expected to rise significantly to 103mt led by an almost 40% hike in soybean stocks, mostly held in South America (Argentina 35mt, Brazil 25mt) and the US 10mt.

Short-term supply disruptions in South America — wetness flagged in Argentina’s Cordoba, northern Santa Fe, dryness in central Buenos Aires, rain slowing harvesting in the north west of Brazil, the Brazilian truckers’ strike — delays, and the slow- 

pace of soybean sales have influenced the market. However, they are unlikely to change the long-term fundamentals for South American production, forecast at 166mt (Brazil 95mt, Argentina 56mt Paraguay 8.5mt others 6mt). The slow pace of soybean sales this year is related to falling global prices — US No 2 soybeans Fob Gulf $388/t (6 March 2015) down from $565/t a year ago; a strong US dollar and depreciating real — led growers to hold soybeans anticipating further falls in the real. For the first time in more than a decade, the real touched R$3.08 to US$1.00 (9 March). Currency fluctuations are likely to further challenge growers when they buy inputs that are mostly based on US dollar pricing. Meanwhile, as the South American harvest gathers momentum, competing pressures on storage should quicken the pace of sales. 

Global soybean trade is raised by 4mt to 117mt in 2014/15, due to rising Asian imports forecast at 87mt. China is expected to import 74mt this season with increased imports also expected for Japan, Malaysia, Philippines,Taiwan,Thailand, 

Indonesia,Vietnam and South Korea, due to strong demand for protein. Elsewhere, Russia’s soybean imports are up 0.4mt to 1.1mt reflecting much higher crush and demand. US soybean exports are expected to increase over last year to 49mt followed by Brazil with exports of 46mt.


With back-to-back-record oilseed crops, supplies have increased while prices have plummeted. Average export price for soybeans No 2 FOB Gulf $388/t (6 March), some $177/t below last year; while Argentine soybeans up river $438/t (6 March) some $132/t below last year. CBOT Futures-May soybeans closed at $9.85/bu (6 March).


Wilmar’s CEO Kuok Khoon Hong, expects China’s soybean meal demand to slow-down in the next year or two and likely to be be slower than in last few years, reflecting an austerity drive in the country. And despite the sharp fall in China’s soybean crush margins in December 2014, expects margins to stay positive this year due to a recent decline in imports; Bunge also confirmed that deteriorating crush margins that fell from about 100 remninbi/t at the start of the October to December quarter to some 10 remninbi/t by the end, had undermined Bunge’s profits in Asia. While volatility resulting from industry overcapacity in China is likely to continue, Soren Schroder, Bunge’s CEO forecasts better times ahead, where the “market is improving, and we expect a return to more normal results.”

Projected soybean meal exports are raised by 5mt to 65mt mainly due to growing Argentine sales up by 4mt to 29mt to South East Asia in 2014/15, more than offsetting declining Indian meal exports.

Average export price for Argentine Soybean meal Pellets, Up River FOB $419/t (15 January); CBOT Futures-May soybean meal closed at $327.7/t (6 March 2015). 

Grain sampling and analysis with Alex Stewart Agriculture Ltd  

Grain and oilseed inspection and analysis are a core businesses of Alex Stewart Agriculture Ltd. (ASA), a superintendent and analyst member of the Grain and Feed Trade Association (GAFTA).

ASA works with many leading grain traders by providing trustworthy professional inspection and laboratory services globally. In addition, ASA can arrange fumigation services in most areas of the world to ensure that cargoes are treated as with the greatest care. Upon nomination, ASA’s mission is to protect its clients’ interests at loading and/or discharge ports worldwide. ASA is also able to provide collateral management services such as supervision of long-term storage of grain or control of transportation between storage facilities.

The head office of Alex Stewart Agriculture Ltd in the UK also provides consultancy services. Strategically and commercially located operations offices offer support and advice regarding ports and silos worldwide and will provide its customers with information concerning the latest industry standards in sampling and analysis.  


Huson & Hardwick and A. Norman Tate Laboratories are GAFTA/FOSFA-registered analytical laboratories that specialize in the analysis of oilseed and edible oil, grain, barley, rye and wheat, animal feed, sugar and food products operate from Alex Stewart’s head office in England and are able to perform a full range of commercial and shipping sample including protein, fat, fibre, ash, moisture analysis via classical wet chemistry and hi- tech instrumentation including NIR, ICP and HPLC; also infestation, foreign matter and admixture, hazardous contents, fuzarious grains, nutritional values, toxic contents (eg. arsenic, mercury and lead) mycotoxins and pesticides.



ASA’s highly experienced and knowledgeable inspection team has built a trusted reputation within the international fertilizer- trading arena. The fertilizer division offers first class inspection and analytical services for bulk, bagged and liquid fertilizer with

the aim of protecting clients’ interests at the production site, during transportation, or at store. ASA has fertilizer laboratories in the UK, Belgium, Ukraine, Russia, South Africa, China and India. Its offices in the UK, Belgium and the Ukraine are all members of the International Fertilizer Association.

Animal feed

The Alex Stewart Group provides a fully comprehensive package of inspection and analytical services. Its GAFTA/FOSFA- registered and approved laboratories strategically located around the world perform a full range of analysis for soya, oilseeds — sunflower and rape, and fish meal including infestation, foreign matter and admixture, hazardous contents, fuzarious grains, toxic contents (e.g. arsenic, mercury and lead) mycotoxins and pesticides.

Grain and wheat

Grain inspection and analysis is a core business of Alex Stewart Agriculture and is a superintendent and analyst member of GAFTA, working with many leading grain traders by providing monitoring, testing and consultancy services globally. In addition fumigation services can be offered as ASA works closely with fumigation companies to ensure that cargoes are loaded and stored in appropriate condition and quality is not affected during transportation. Grain inspection services also extend to providing collateral management services such as supervision of long term storage of grain or control of transportation between storage facilities.


Warehouse inventory control and collateral management: ASA can provide a  diverse range of services, from stock audits and control procedures, to security advice and commodity/store condition surveys.

Pre-shipment inspection and analysis: the Alex Stewart inspection team will check that its client’s product is within specification and fit for the intended use.

Quality control: checking that clients’ cargoes conform to contractual specifications, checking cargo for signs of contamination, odour, colour change, moisture levels, friability, protesting/rejecting inferior cargo on sight, granule sizing, radioactivity testing and laboratory analysis.

Vessel hatch inspection: service includes checking hatch condition ensuring that they are free from loose rust and paint flake, free from previous cargo, checking that hatches are tight fitting, checking hatch open and closing operation is functional and timely, inspecting hatch rubber condition, hatch hose water testing, checking that holds are water-tight.
Vessel hold cleanliness: detailed inspection ensures that holds are clean, dry, free of loose rust and paint flake, free from previous cargo, free from infestation and odour and in every respect fit to receive the designated cargo.

Continuous supervision: ASA guarantees continuous supervision of clients’ cargo loading and/or discharge (24 hours), representative sampling/sealing as per contract.

Quality control inspection: packaging reporting as applicable.

Weight verification: gross, tare and net weighing.
Weighbridge control: test weight checking, scale calibration and certification check, recording truck movements across scale ensuring that all cargo is weighed.

Bagging supervision and tallying: full tally and checking for bag strength and durability (laboratory testing is available) and verifying markings.

Continuous information updates: ASA’s busy administration centre is in contact with all of its inspectors operating in the field and provides customers with up-to-date, hour-by-hour detail of all loading and discharging operations.

Documentation: ASA uses state-of-the-art technology to supply standardized reports and certificates; certification and reporting can be tailored to suit clients’ requirements. Photographic reports by conventional and digital camera can also be supplied for evidence purposes.

Damaged cargo assessment: establishing possible source, cause, and severity.

Loss prevention: supervision of reconstitution of acceptable cargo.

Container services: supervision of stuffing and unstuffing, container sealing, container condition surveying (on/off hire, damage assessment).

Transportation services: whether the commodity is manufactured, stored, shipped, railed, trucked or containerized, ASA can assist clients in trading activities.

Consultancy: ASA offers consultancy services to assist clients on methods concerning material handling, weighing, transportation, sampling and analysis. Local knowledge and years of experience are primary assets of ASA’s business.

KEY AGRICULTURAL GAFTA/FOSFA SUPERINTENDENT OPERATIONS WITHIN ALEX STEWART AGRICULTURE Argentina, Australia, Belgium, Brazil, Bulgaria, Chile, China, Egypt, Estonia, Germany, Italy, India, Indonesia, Kazakhstan, Latvia, Malaysia, Netherlands, Peru, Philippines, Romania, Russia, Spain, Thailand,Turkey, Ukraine, UK, Uruguay & USA.