Mexico. Grain and Feed Update Июнь 6, 2016

Highlights

Corn production is likely to increase slightly in marketing year (MY) 2016/17 (October/September) to 24.2 MMT, mostly due higher planted area than initially anticipated, and assuming favorable weather conditions. The wheat production estimate is down for MY2016/17 (July/June), due to insufficient water supply in the “Bajio" region (Guanajuato, Michoacan, and Jalisco). Rice production is forecast to be up in MY2016/17, reflecting information from industry and official contacts. The Post/New total sorghum production and harvested area estimates for MY 2015/16 were revised downward and upward, respectively, based on updated official data. MY2016/17 imports are forecast lower for corn while up slightly for wheat.

WHEAT

Production

Total wheat production and harvested area estimates for MY 2016/17 (July/June) have been revised downward based on updated official data, which reflects relatively insufficient water supply, mainly in the “Bajio" region, encompassing Guanajuato, Michoacan, and Jalisco. The National Water Commission (CONAGUA) reported that as of May 24, 2016, in the state of Guanajuato the main dams registered a level of capacity lower than the same date in 2015 As a result, official sources indicated that planting intentions were reduced by approximately 30,000 hectares in that region, as many growers have reportedly switched acreage to barley, which has lower water requirements. Practically all of the production in the Bajio region is irrigated. While the production throughout Bajio decreased, overall production in Mexico, especially in Sonora and Baja California, the main wheat producing states, was reported as good by sources of the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Foodstuffs (SAGARPA).

Trade

The Post/New total wheat import estimate for MY 2016/17 has been revised upward from USDA/Official data to 4.3 MMT, based on official data from the General Customs Directorate of the Secretariat of Finance (SHCP) and SAGARPA for the first ten months of this marketing year. The revised data reflects the impact of lower than previously estimated domestic production.

Stocks

The Post/New ending stocks estimate for MY 2015/16 is less than the USDA/Official estimate (579,000 MT) as a result of slightly lower-than-expected production.

Production, Supply and Demand Data Statistics:

CORN

Production

Due to revised SAGARPA data, and preliminary information from private sources, the Post/New estimates for corn production and harvested area for MY 2016/17 were adjusted upward. Official sources stated that corn planting intentions of the main producing states for the 2016 spring/summer crop cycle have been higher than initially anticipated, due the lack of feasible alternative crops, and assuming favorable weather conditions. Since approximately 88 percent of the corn produced in spring/summer cycle is rain-fed, the rains starting in June are critical to crop production. The main producing states of this crop cycle are Jalisco, Mexico, Michoacan, Chiapas, Guanajuato, Oaxaca and Puebla. These states account for approximately 55 percent of the spring/summer corn production. Approximately 76 percent of Mexican corn is obtained from the spring-summer crop cycle.

If favorable weather conditions prevail, the overall yield for the MY2016/17 corn crop in Mexico is forecast to reach 3.408 MT/ha, which is slightly lower over the MY2015/16 average yield. The yield level of MY2015/16 was considered exceptional due to the very favorable weather conditions. The Post/New MY2015/16 production and harvested area estimates were revised upward, reflecting final preliminary official data from SAGARPA

Consumption

The Post/New total consumption estimate for MY2015/16 has been revised upward from USDA/Official figures. According to private and official sources feed consumption is expected to shift somewhat from sorghum to corn, due to lower than previously estimated domestic sorghum production. For MY2016/17, the total corn consumption estimate remains unchanged.

Trade

The Post/New total corn import estimate for MY 2016/17 has been revised downward from USDA/Official data to 12.5 MMT, reflecting the impact of higher-than previously estimated domestic production. Similarly, the Post/New total corn export estimate for MY 2015/16 has been revised downward from USDA/Official data to 900,000 MT, based on official data from SAGARPA for the first eight months of this marketing year.

Stocks

The Post/New 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, which was also adjusted upward from USDA/Official estimate.

Production, Supply and Demand Data Statistics

SORGHUM

Production

The Post/New total sorghum production and harvested area estimates for MY 2015/16 have been revised downward and upward, respectively, based on updated official data released by SAGARPA. These statistics include the final result of the 2015 spring/summer crop cycle, as well as from available information as of April 30, 2016, for the 2015/16 fall/winter crop cycle.

Consumption

The Post/New total consumption estimate for MY2015/16 has been revised downward from the USDA/Official estimate to 6.3 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 and consequently higher domestic prices.

Stocks

The Post/New estimated ending stocks for MY 2015/16 have been increased to 288,000 MT in comparison with USDA/Official estimate in response to reduced consumption. The ending stocks estimate was reflected in the carry over for MY 2016/17, which was also adjusted upward from USDA/Official estimate.

Production, Supply and Demand Data Statistics:

RICE

Production

The Post/New total rice production estimate for MY 2015/16 (October to September) has been revised upward by 4.5 percent from USDA/Official estimates to 233,000 MT (rough production), reflecting the most recent data from SAGARPA as of April 30, 2016. This volume of rough rice production is equivalent to 160,000 MT of milled rice. The Post/New estimation includes the preliminary final official figures for the 2015 spring/summer crop cycle and the updated data of the 2015/16 fall/winter crop cycle. Similarly, the production estimate for MY2016/17 has been adjusted slightly upward to 252,000 MT (rough production) from the estimate reflecting information from industry and official contacts. SAGARPA officials stated that their updated data for MY 2016/17 is based on information of its state offices and farmers' planting intentions. This rice rough production is equivalent to 173,000 MT of milled rice.

Stocks

As a result of new domestic production information, the Post/New MY 2015/16 ending stocks estimate has been increased slightly, to 139,000 MT, from the Official estimates, due to higher-than-previously estimated domestic production. This is reflected in the upward adjustment to MY2016/17 carry over as well.

Production, Supply and Demand Data Statistics: