Chinese wheat better than expected

It turns out that the world’s biggest wheat producer is not having a disastrous year.

In March, China’s minister of agriculture told reporters that heavy rainfall and flooding in the fall of 2021 delayed seeding of one-third of the country’s winter wheat.

“Not long ago we went to the grassroots to do a survey and many farming experts and technicians told us that the crop conditions this year could be the worst in history,” said Tang Renjian.

“This year’s grain production indeed faces huge difficulties.”

But that’s not what current satellite-based maps of vegetative growth are suggesting, said David Streit, chief operating officer of Commodity Weather Group.

“Interestingly, most of the heart of the wheat areas look fairly decent as far as vegetative health goes,” he said.

“From our standpoint, it still looks like a favourable production potential this year.”

In fact, according to normalized difference vegetation index (NDVI) maps produced by the U.S. Department of Agriculture, vegetative growth is well above normal in the provinces of Henan, Shandong, Anhui, Hebei, Jiangsu and Sichuan, which combined account for three-quarters of the country’s wheat production.

Streit said the crop did get off to a poor start but there was favourable shower activity during China’s dry season up until April, when it turned dry in some areas.

About one-quarter of the crop in the northeast corner of the wheat belt is currently experiencing potentially problematic dry conditions.

The forecast calls for showers in that area during the second week of May. If those showers falter, then that area could experience yield losses because the crop is entering the heading phase of development in that region.

But the other three-quarters of the growing area should make up for any potential yield losses in the northeast.

The general forecast calls for normal to above-normal rainfall in May, so the country is likely looking at above-trend yields.

MarketsFarm analyst Bruce Burnett was skeptical about the government’s report of the worst winter wheat crop in history right from the get-go.

“It’s very unlike China to tell you that things are really abysmal,” he said.

He agrees with Streit that conditions look pretty good right now. Farmers are in harvest mode in southern and central regions and there are no reports of big yield problems.

The burning question is how much wheat will the country import?

China has become Canada’s top customer in recent years.

The country imported 9.77 million tonnes of wheat from around the world in 2021, which is slightly higher than its tariff rate quota (TRQ) limit of 9.64 million tonnes.

“With the increase in (wheat) prices, I would say the chances of a repeat of that program are maybe not as likely,” said Burnett.

But if domestic wheat use goes up or stocks fall to unacceptable levels then you never know, he said.

Tags: winter wheat, wheat, yield, losses, flooding, China, rainfall