Report Highlights:

Forecast for marketing year (MY)2015/16 corn, wheat, sorghum, and rice production all hold steady at 23.5 MMT, 3.7 MMT, 7.8 MMT, and 240,000 MT (rough rice production), respectfully. Mostly due to favorable weather conditions, MY2014/15 corn, wheat, and rice production estimates are up slightly, while sorghum production is forecast down due to adverse weather conditions in the sorghum producing regions of the country. MY2014/15 imports of corn, wheat, sorghum and rice are all forecast down.

WHEAT

Production:

The Post/New total wheat area harvested estimate for MY2015/16 (July to June) has been revised upward from USDA/Official estimates reflecting the updated official data from Mexico's Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Foodstuffs (SAGARPA). Official sources stated that despite the increased area planted, estimated total production has remained unchanged due to an unseasonably warm December and January in the northwest states of Mexico as well as in Guanajuato, which adversely affected yields.

Official and industry contacts stated that this year's wheat production has been damaged by unfavorable weather conditions, despite the sufficient water availability in the reservoirs and dams used for irrigation purposes in Mexico's main producing wheat states. In Sonora, for example, wheat production in the 2014/15 fall/winter crop cycle is expected to reach 1.646 million metric tons (MMT), or 12 percent lower compared to the initial estimation, despite the fact that 22,000 more hectares( has) were planted than during the same crop cycle a year ago. According to the International Maize and Wheat Improvement Center (CIMMYT), the main causes of this decline were the drastic temperature changes in the Yaqui and Mayo Valleys. The average temperature in the last 35 years has been approximately 9.5° Celsius. However, in 2015, the average temperature increased to 12.15° C.

According to CIMMYT, the most important effect temperature has on wheat is that it impacts the rate in which a plant develops throughout the various stages, including producing leaves, tillers and other components. Essentially, all parts of the plant develop progressively faster as temperatures rise between a base and an optimum temperature. Moreover, yields can decline by up to 4 percent for every 1°C rise in mean temperature at higher temperatures because the grain filling period becomes very short. During the stage when wheat tillers are developing, colder weather is important. As the cold accumulation lengthens in this stage, the plant obtains more stems and consequently a greater leaf area which ultimately leads to higher yields per unit. Therefore, wheat requires lower temperatures for its growth stage to obtain optimal development.

Official sources estimate a reduction of more than one ton per hectare on yields in Sonora against the initially estimated (6.001 MT/Ha) due to the unseasonably warm winter. Sonora continues to be the main wheat producing state with approximately 46 percent of total wheat production, followed by Baja California, which contributes 16 percent, and Guanajuato with 15 percent.

The Post/New total wheat production and harvested area estimates for MY2014/15 (July/June) have been revised slightly upward from USDA/Official, based on final official data from SAGARPA.

Trade:

The Post/New wheat import estimate for MY2014/15 has been revised slightly downward from the USDA/Official estimate to 4.533 MMT, based on preliminary official data from SAGARPA and the General Customs Directorate of the Finance Secretariat (SHCP) for this marketing year.

Similarly, Post's wheat export estimate for MY2014/15 has decreased to 1.1 MMT from the USDA/Official estimate. These figures are also based on official figures from SAGARPA and SHCP.

Consumption:

The Post/New total wheat feed and residual consumption estimate for MY2014/15 and MY2015/16 have been revised upward from the USDA/Official estimates reflecting the most recent data from SAGARPA. Official sources stated that farmers in the northwest region of Mexico, who traditionally use part of their crop for animal feed, have slightly increased their wheat feed use in MY2014/15, due to lower than expected wheat exports. Consequently, wheat feed availability is marginally higher. This same level of wheat feed and residual consumption is expected to continue in MY2015/16.

Stocks:

Post's ending stock estimate for MY 2014/15 is higher than the USDA/Official estimate (584,000 MT) as a result of lower-than-expected exports. This was reflected in the carry over for the MY 2015/16 which was also adjusted upward.

Mexico, Wheat Production, Supply and Demand for MY2013/14 to MY2015/16

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

638

638

696

707

700

820

Beginning Stocks

275

275

316

316

337

584

Production

3377

3377

3671

3687

3700

3700

MY Imports

4636

4636

4600

4533

4400

4400

TY Imports

4636

4636

4600

4533

4400

4400

TY Imp. from U.S.

3153

3153

0

2784

0

3250

Total Supply

8288

8288

8587

8536

8437

8684

MY Exports

1322

1322

1500

1102

1300

1300

TY Exports

1322

1322

1500

1102

1300

1300

Feed and Residual

350

350

300

400

250

400

FSI Consumption

6300

6300

6450

6450

6600

6600

Total Consumption

6650

6650

6750

6850

6850

7000

Ending Stocks

316

316

337

584

287

384

Total Distribution

8288

8288

8587

8536

8437

8684

(1000 HA) ,(1000 MT)

CORN

Production:

The forecast production for MY 2015/16 (October to September) remains unchanged from USDA/Official estimates. However, the Post/New corn production and harvested area estimates for MY 2014/15 have been revised upward, based on updated official data from SAGARPA. These statistics include the preliminary final results of the 2014/15 fall/winter crop cycle as well as the final figures for the 2014 spring/summer crop cycle. Market analysts have stated that results for the 2014/15 fall/winter crop cycle (MY 2014/15) have been better than previously estimated due to higher planted area and better yields registered due to favorable weather conditions.

According to SAGARPA figures, as of May 31, 2015, corn planted area for the 2014/15 fall/winter crop cycle was 26.2 percent higher than the similar crop cycle a year earlier. This increase in planted area is mainly attributed to higher planted area in Sinaloa. During this crop cycle, Sinaloa farmers planted approximately 122,000 hectors more than the same crop cycle a year ago due to plentiful water levels in Sinaloa's reservoirs which are used for irrigation purposes. According to the National Water Commission (CONAGUA), at the beginning of the sowing season in September, 2014, the availability of Sinaloa's water reservoirs was of 11.6 billion cubic meters (versus 7.6 billion cubic meters registered on July 8, 2015).

Regarding weather conditions in Sinaloa, the main corn producing state in the Northwest Region of Mexico, winter season maximum temperatures showed a normal pattern. However, this was not the case for minimum temperatures, which were above the average of the last ten years by 1.8 ° Celsius (average minimum temperature: 10.3 ° C). Consequently, during the growing season, there was enough water availability and the winter season was mild. According to private and official sources, corn yield potential is best achieved at the time when the plant reaches physiological maturity with maximum dry matter content. This happens when corn has a moisture content of 37-38 percent. From that point it is necessary to wait for corn moisture content to decrease to approximately 14 percent before harvesting the crop. The environment temperature influences crops in several aspects; in the case of corn plant development to reach physiological maturity, development is based on the storage capacity of a certain level of heat-hours during Phonological development. At this point, weather conditions registered in Sinaloa were excellent for corn production. As a result, based on the increased corn planted area and the excellent growing conditions, it is expected that Sinaloa will reach approximately 5.2 MMT, which is consider a record production level. Sinaloa continues to be the main source for commercial white corn production in Mexico for the fall/winter crop cycle, representing approximately 70 percent of total fall/winter crop production. Also, Sinaloa's corn production, which is almost all irrigated, accounted for nearly 24 percent of total domestic production. Harvest of the fall/winter crop traditionally takes place during the months of May and June.

Trade:

The Post/New total corn import estimate for MY 2014/15 has been revised downward from USDA/Official data to 9.0 MMT. The revised data reflects the impact of higher than previously estimated domestic production and is based on official data from the SHCP and SAGARPA for the first nine months of this marketing year.

Mexico, Corn Production, Supply and Demand for MY2013/14 to MY2015/16

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

7052

7052

7150

7300

7000

7000

Beginning Stocks

1061

1061

2694

2694

2644

2644

Production

22880

22880

24000

25000

23500

23500

MY Imports

10954

10954

10000

9000

10300

10300

TY Imports

10954

10954

10000

9000

10300

10300

TY Imp. from U.S.

10918

10918

0

9000

0

10300

Total Supply

34895

34895

36694

36694

36444

36444

MY Exports

501

501

500

500

500

500

TY Exports

501

501

500

500

500

500

Feed and Residual

15200

15200

16800

16800

17150

17150

FSI Consumption

16500

16500

16750

16750

16800

16800

Total Consumption

31700

31700

33550

33550

33950

33950

Ending Stocks

2694

2694

2644

2644

1994

1994

Total Distribution

34895

34895

36694

36694

36444

36444

(1000 HA) ,(1000 MT)

SORGHUM

Production:

The Post/New total sorghum production and harvested area estimates for MY 2014/15 have been revised downward, based on updated official data. These statistics include the final result of the 2014 spring/summer crop cycle as well as from available information as of May 31, 2015, for the 2014/15 fall/winter crop cycle. Sorghum production in the 2014/15 fall/winter crop cycle was lower-than-initially estimated in Tamaulipas, the main sorghum producing state. Sorghum growers in this state expect production to reach approximately 2.5 MMT in the 2014/15 fall/winter crop cycle, against 3.1 MMT obtained in the same crop cycle last year, due to unfavorable weather conditions.

According to the Mexican National Sorghum Council (CONASORGO), this drop in production is attributed to over abundant rainfall which prevented good field preparation that led to the delay or prevention of sorghum plantings in some areas. In addition, during the last weeks of June, when the crop was ready to be harvested, heavy rains throughout several sorghum producing areas prevented many farmers from entering their fields with their harvesting equipment due to muddy fields and roads leading into their fields. Official sources stated that another problem was an outbreak of the plague called "yellow aphid", which also adversely affected some sorghum producing areas in Tamaulipas.

Trade:

The Post/New sorghum import estimate for MY2014/15 has been revised downward from USDA/Official estimate to 25,000 MT based on preliminary official data from SAGARPA and SHCP covering the first nine months of the marketing year. Similarly, Post/New MY2014/15 sorghum exports estimate has been revised upward from 7.0 MMT to 10.0 MMT based also on updated official information from SAGARPA and SCHP.

Stocks:

Ending stocks for MY2014/15 have been revised downward to 248,000 MT from the USDA/Official estimate, due to lower production than previously estimated. The ending stocks estimate was reflected in the carry over for the MY 2015/16 which was also adjusted downward.

Mexico, Sorghum Production, Supply and Demand for MY2013/14 to MY2015/16

Sorghum

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2073

2073

1800

1666

1900

1900

Beginning Stocks

285

285

647

647

540

248

Production

8500

8500

7300

6686

7800

7800

MY Imports

162

162

100

25

100

100

TY Imports

162

162

100

25

100

100

TY Imp. from U.S.

162

162

0

25

0

100

Total Supply

8947

8947

8047

7358

8440

8148

MY Exports

0

0

7

10

0

0

TY Exports

0

0

7

10

0

0

Feed and Residual

8200

8200

7400

7000

7600

7600

FSI Consumption

100

100

100

100

100

100

Total Consumption

8300

8300

7500

7100

7700

7700

Ending Stocks

647

647

540

248

740

448

Total Distribution

8947

8947

8047

7358

8440

8148

(1000 HA) ,(1000 MT)

RICE

Production:

The Post/New rice production estimate for MY2014/15 (October-September) has been revised upward to 250,000 MT (rough production) due to more complete data from SAGARPA. The increased rough production is equivalent to 172,000 MT of milled rice. Rice output was increased mainly due to higher than expected planted area.

Trade:

In comparison with the USDA/Official estimate, the Post/New import estimate for MY 2014/15 was lowered to 685,000 MT, in order to reflect available information from SAGARPA and SHCP for the first nine months of this marketing year. Moreover, the Post/New rice export estimate for MY2014/15 has been revised downward to 2,000 MT, based also on updated information from SAGARPA and SHCP for the first nine months of this marketing year.

Stocks:

The MY 2014/15 Post/New ending stocks estimate was revised lower from the USDA/Official estimate to 116,000 MT due to lower than previously expected import volumes. It was reflected in the carry over for the MY 2015/16 which was also adjusted downward.

Mexico, Rice Production, Supply and Demand for MY2013/14 to MY2015/16

Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

35

35

40

43

41

41

Beginning Stocks

189

189

151

151

191

116

Milled Production

131

131

158

172

165

165

Rough Production

191

191

230

250

240

240

Milling Rate (.9999)

6870

6870

6870

6870

6870

6870

MY Imports

693

693

775

685

785

785

TY Imports

658

658

775

685

785

785

TY Imp. from U.S.

535

535

0

605

0

690

Total Supply

1013

1013

1084

1008

1141

1066

MY Exports

2

2

3

2

3

3

TY Exports

2

2

5

2

5

4

Consumption and Residual

860

860

890

890

910

910

Ending Stocks

151

151

191

116

228

153

Total Distribution

1013

1013

1084

1008

1141

1066

(1000 HA) ,(1000 MT)