Highlights

Post's wheat production estimate has been revised slightly downward to 3.9 million metric tons (MMT) from the Official estimate based on updated official figures from the Mexican government. On July 23, 2016 the president of the National Rice Product System announced a new governmental support program for rice growers to boost domestic rice production and productivity and provide an alternative crop that improves farmers' income.

Production

As a result of insufficient water for irrigation, the total wheat production estimate for marketing year (MY) 2016/17 has been revised slightly downward to 3.9 million metric tons (MMT). Despite an upward revision to the harvested area estimate for MY2016/17 to 720,000 hectares (ha) to reflect updated official data, sources stated that the insufficient water supply adversely impacted yields. Also, unattractive prices in foreign markets stimulated producers to shift to alternative crops. According to official sources, for example, in Guanajuato approximately 60,000 ha were planted with barley instead of wheat in the 2015/16 fall-winter crop cycle.

Consumption

Post's feed consumption estimate for MY2015/16 has been revised downward to 300,000 MT based on official data of the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Foodstuffs (SAGARPA). Official sources state that due to higher domestic corn production in this marketing year, there is an increased possibility that livestock producers, particularly the hog sector, could increase the use of domestic white corn at the expense of domestic durum wheat.

Trade

Post's total wheat export estimate for MY 2016/17 has been revised downward from USDA/Official data to 1.2 MMT. The revised data reflects the impact of lower than previously estimated domestic production. Also, the total wheat export estimate for MY 2015/16 has been revised upward from USDA/Official data to 1.5 MMT, based on official data from the General Customs Directorate of the Secretariat of Finance (SHCP) and SAGARPA for this marketing year.

Stocks

Post's ending stocks estimate for MY 2015/16 is less than the USDA/Official estimate (679,000 MT) as a result of higher-than-expected exports. The ending stocks estimate was reflected in the carry over for MY 2016/17, which was also adjusted downward.

Production, Supply and Demand Data Statistics:

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

May 2015

Jul 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

707

707

825

825

710

720

Beginning Stocks

319

319

528

528

779

679

Production

3687

3687

3751

3751

3970

3900

MY Imports

4476

4476

4800

4800

4200

4200

TY Imports

4476

4476

4800

4800

4200

4200

TY Imp. from U.S.

3065

3065

0

2400

0

3200

Total Supply

8482

8482

9079

9079

8949

8779

MY Exports

1104

1104

1300

1500

1300

1200

TY Exports

1104

1104

1300

1500

1300

1200

Feed and Residual

400

400

400

300

450

450

FSI Consumption

6450

6450

6600

6600

6670

6670

Total Consumption

6850

6850

7000

6900

7120

7120

Ending Stocks

528

528

779

679

529

459

Total Distribution

8482

8482

9079

9079

8949

8779

CORN

Post's total corn production estimate for MY 2016/17 has been revised downward from USDA/Official data to 23.5 MMT, based on more complete data from SAGARPA. According to official sources, irregular rains during June and July have delayed the planting season in the non-irrigated areas of the 2016 spring/summer crop cycle. Sources indicated that this situation will adversely impact yields. Since approximately 75 percent of corn produced during the spring/summer cycle is rain fed, the monsoons starting in June continue to be the major source of irrigation.

Production:

Post's total production area estimate for the MY 2015/16 corn crop has been raised to 25.8 MMT, due to slightly increased planted area and very favorable weather conditions during the 2015/16 fall/winter crop cycle in the main producing areas. Total production for the 2015/16 fall/winter-corn crop is estimated at 8.4 MMT. This would be an increase from the previous year's 7.3 MMT, due to the high reservoir levels and increased planted area. For example, according to SAGARPA data, Sinaloa's planted area increased from 487,840 hectares in fall/winter 2014/15 crop to 566,123 hectares during the same period of 2015/16. Sinaloa is the principal white corn producing state, accounting for approximately 80 percent of the total output of the fall/winter crop. The higher production estimate for fall/winter 2015/16 crop also reflects greater yields from increased precipitation and ample irrigation supplies in Sinaloa.

At this point in the season, total estimated average yield for the 2015/16 fall/winter crop cycle is forecast to be higher than last year's at 6.4 MT/ha, due to the favorable weather conditions and the availability of water for irrigation. It should be noted that depending in large part on the level of technology used, yields continue to vary significantly throughout Mexico. In Sinaloa, for example, average yield is expected to reach 10.8 MT/ha in the 2015/16 fall/winter crop cycle, against 10.6 MT/ha reached the same crop cycle last year, because of the factors already mentioned, and because the majority of corn is produced using advanced farming technology by the growers of this state.

Trade:

Post's total corn import estimate for MY 2015/16 has been revised downward from USDA/Official data to 13.0 MMT, based on official data from the SHCP and SAGARPA for the first nine months of this marketing year. The revised data reflects the impact of higher than previously estimated domestic production. Similarly, Post's MY 2015/16 total exports estimates have been revised upward because of increased domestic production and based on official data from SAGARPA and SHCP for the same period mentioned for the exports estimate.

Stocks:

Post's MY2015/16 estimated ending stocks were revised upward, due to higher than previously estimated domestic production. The ending stocks estimate was reflected in the carry over for the MY 2016/17.

Production, Supply and Demand Data Statistics:

Corn

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

7325

7325

7200

7205

7100

7100

Beginning Stocks

2603

2603

4118

4118

5418

5618

Production

25480

25480

25000

25800

24500

23500

MY Imports

11269

11269

13500

13000

13500

13500

TY Imports

11269

11269

13500

13000

13500

13500

TY Imp. from U.S.

11168

11168

0

12500

0

12900

Total Supply

39352

39352

42618

42918

43418

42618

MY Exports

784

784

1000

1100

800

800

TY Exports

784

784

1000

1100

800

800

Feed and Residual

17700

17700

19400

19400

20100

20100

FSI Consumption

16750

16750

16800

16800

16900

16900

Total Consumption

34450

34450

36200

36200

37000

37000

Ending Stocks

4118

4118

5418

5618

5618

4818

Total Distribution

39352

39352

42618

42918

43418

42618

SORGHUM

Production:

Post's MY 2016/17 (October/September) sorghum production estimate has been revised downward from USDA/Official forecast due to smaller than previously estimated planted area, irregular weather conditions, and the prevalence of sugarcane aphid infestations in many producing areas. These include Guanajuato, Michoacan, and Jalisco in West Central Mexico (called the “Bajio" region), where the bulk of the fall harvest is produced. In addition, government contacts stated that the rainy season this year has been very irregular which also contributes to slow plantings and could eventually cause a reduction in yields, compared to the initial expectations.

Post's total sorghum harvested area estimate for MY 2015/16 has been revised upward to1.67 million ha, based on updated official data released by SAGARPA. These statistics include the final result of the 2015 spring/summer crop cycle, as well as available information as of June 30, 2016, for the 2015/16 fall/winter crop cycle.

Consumption:

Post's total consumption estimate for MY2016/17 has been revised downward from the USDA/Official estimate to 7.2 MMT, based on information from official sources. Feed consumption is expected to shift away from sorghum to feed corn, due to lower than previously estimated domestic sorghum production.

Stocks:

Post's estimated ending stocks for MY 2016/17 have been decreased to 288,000 MT in comparison with USDA/Official estimate in response to reduced domestic production.

Production, Supply and Demand Data Statistics:

Sorghum

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1715

1715

1622

1672

1800

1710

Beginning Stocks

647

647

338

338

388

388

Production

6270

6270

5550

5550

6900

6500

MY Imports

29

29

700

700

700

700

TY Imports

29

29

700

700

700

700

TY Imp. from U.S.

29

29

0

700

0

700

Total Supply

6946

6946

6588

6588

7988

7588

MY Exports

8

8

0

0

0

0

TY Exports

8

8

0

0

0

0

Feed and Residual

6500

6500

6100

6100

7400

7200

FSI Consumption

100

100

100

100

100

100

Total Consumption

6600

6600

6200

6200

7500

7300

Ending Stocks

338

338

388

388

488

288

Total Distribution

6946

6946

6588

6588

7988

7588

RICE

Production:

Post's total rice production estimate for MY 2015/16 (October to September) has been revised downward approximately 7 percent from the USDA/Official estimate to 217,000 MT (rough production), based on SAGARPA data as of June 30, 2016. This volume of rough rice production is equivalent to 149,000 MT of milled rice.

On July 23, 2016, the president of the National Rice Product System, Luis Bueno Torio, indicated that after more than a year of requesting government support, in June SAGARPA finally granted support payments of 3,000 pesos per hectare for irrigated plots (US$161/ha) and 1,500 pesos per hectare for non-irrigated land (US$80.50/ha) , for a period of three years. He pointed out this amount represents approximately 20 percent of cultivation cost and will benefit approximately 3,000 rice growers in seven states that should produce new rice varieties during the current and following two planting crop seasons. The main objective of this new support program is to boost domestic rice production and its productivity, in order to increase its market share in the Mexican market and provide an alternative crop to improve farmers' income. The goal is the gradual establishment of 51,900 ha under this program over a period of three years.

Also, Bueno Torio explained that the support may be used by more than 50 percent of rice growers, who have the option to plant new varieties of long grain rice seeds, two of them developed by the National Institute of Forestry, Agriculture, and Livestock (INIFAP), a decentralized agency of SAGARPA. The goal is to increase domestic production by almost 200,000 MT in the 2018 crop cycle – at the end of the new support program – to reach up to 380,000 MT. This volume represents almost twice what it is produced currently. The producing states that will benefit with this new supports are: Campeche, Jalisco, Nayarit, Michoacan, Tamaulipas, Tabasco, and Veracurz. Lastly, Bueno Torio indicated that with this new support, Mexico is expected to import as much as 60 percent of its rice, which he said would help avoid unfair competition in the domestic rice market.

Trade:

Post's total rice import estiate for MY 2015/16 has been revised downward from Official data to 690,000 MT. The revised data reflects the updated official information from SAGARPA and SHCP for the first nine months of this marketing year. Similarly, rice total export estimate for the MY2015/16 has decreased from the Official estimate to 2,000 MT. These figures are also based on official figures from SAGARPA and SHCP for the same period of this marketing year.

Stocks

Post's ending stock estimate for MY 2015/16 (113,000 MT) is lower than the USDA/Official estimate as a result of lower than expected domestic production and imports. This was reflected in the carry over for the MY 2016/17, which was also adjusted downward.

Production, Supply and Demand Data Statistics:

Rice, Milled

2014/2015

2015/2016

2016/2017

Market Begin Year

Oct 2014

Oct 2015

Oct 2016

Mexico

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

44

44

39

39

42

42

Beginning Stocks

155

155

161

161

133

113

Milled Production

179

179

160

149

173

173

Rough Production

261

261

233

217

252

252

Milling Rate (.9999)

6870

6870

6870

6870

6870

6870

MY Imports

709

709

700

690

750

750

TY Imports

719

719

700

690

750

750

TY Imp. from U.S.

620

620

0

545

0

600

Total Supply

1043

1043

1021

1000

1056

1036

MY Exports

2

2

3

2

2

2

TY Exports

2

2

5

2

2

2

Consumption and Residual

880

880

885

885

890

890

Ending Stocks

161

161

133

113

164

144

Total Distribution

1043

1043

1021

1000

1056

1036