The September-October 2011 issue of Grain & Feed Milling Technology discusses global feed market conditions, noting challenges due to adverse weather impacting crops like maize and wheat. It mentions rising wheat and oilseed prices amid concerns over crop quality and yields, particularly in the United States and Canada, while highlighting the potential for a rebound in grain prices. The publication also emphasizes the importance of careful supply management in the context of fluctuating market demands and quality issues.

1. Digital Re-print - September | October 2011
Global Feed Markets: September - October 2011
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2. News September - October 2011 NEWS
COMMODITIES
GLObAL
G
GRAIN & FEED MARKETS
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experience required to carry closely with major machine system and minor ingredients The end result was a facility
Every issue GFMT’s market analyst John Buckley reviews
out the design and installation manufacturers that manufactured dr y
world trading conditions which arematerials, processing and t oof p r o v i d e
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will influence your decision-making.
array of sectors including ; processes tailoring demand, with the clients
Animal & petfood, biomass the design to the r ange of dr y pet foods
& fuel generation, grain & client’s budget and stocked in most major
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construction & quarrying. future addition of
equipment and processes as and sack tipping station for More inforMation:
Indian crops all much bigger isolation from the coarse /feed
“With the G ame h ave de signed and companies grow,” says the addingthan expected a month or two
sack additions directly grains which, thanks to maize,
Game Engineering Ltd
Wheat supply grows and
installed numerous production company. into tago, there is clearly no lack of
he mixing chamber, are presenting a far more bullish
Witham St Hughs
Latin American plants over the years and A n example of a projec t e x t r u wheata n d the e u m a t imarket
d e r on p n world c story than we expected in our
Business Park
made alterations for the major which Game completed for conveying system suit able
for self-supplying or importing last issue. This is mainly due to
Witham St Hughs
planting season
grows as corn crop shrinks
producers and built green field a client consisted of a bulk for transferring product to
users. Indeed, world production troublesome crop weather in the
Lincoln
sites for the up and coming storage block of six smooth dryer at timates are s till r ising
es five tonnes per hour largest supplying country, the USA.
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constantly , we go to As mentioned earlier, this crop was
United Kingdom
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with the International Grains Council and tonnes (due to more substitution of tight, sown late after a wet spring. Now it seems
Tel: +44 1522 868021
weather there grinding ; mixing ; extruding d i s c h a r g e r s r a t e d a t 2 0 handling dried extrusions at
the US Department of Agriculture+44 1522 868027
Fax: currently expensive maize in the feed sector), world that the planted area was smaller and the
and vacuum coating projects tonnes per hour, weigh boat four tonnes per677/678m tonnes – Email: sales
predicting hour, coater 26/30m more ending stocks of wheat in July 2012 now seem rate of abandonment larger than expected.
will be keenly along with their control can all suspended under the bulk and screening year and the third biggest crop ever. likely to exceed the past season’s relatively
than last and conveying
C
@game-engineering.com Heatwaves have interfered with pollination
ROSSWINDS continued to buffet second year running. Canada and the storage silos, discharge and
be undertaken by Game. Northern systems suitable for handling
Some analysts see that expanding even more high 193m tonnes – hardly justification for still
Website: during July, resulting in some unusually poor
watched for its world grain and feed markets during O u e x p e r somewhat with transfer handling equipment
US“haver struggledi e n ce i n t h i s wet weather dried extrusions and a coolerin. Even with global rather high wheat prices.
when all the harvests are www.game-engineering.com predictions for national average yields and
the later summer months, making and in the US case, potential quality problems, consumption rising by an above-trend 20/22m Wheat, of course, cannot be viewed in a what looks like a disappointing crop in a
potential to push for choppy conditions and a lack of for their top grade spring breadwheat harvests. GFM03 Mog65th#4 Screen 132x90:GFMT 132x90 01/02/2011 13:19 Page 1
consistent price direction. Fortunately for consumers, Canada’s crop is turning
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also some debate Russia, Ukraine and Kazakhstan) are doing even mitigate smaller crop size. There is also plenty
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Grain&feed millinG technoloGy Grain &feed millinG technoloGy September - october 2011 | 7 September - october 2011 | 31

3. COMMODITIES
year when markets needed a big rebound in recent record high levels. Continuing strength not given up yet on grain and oilseed prices wheat feeding total go even higher than this as than markets expected including a
production to replenish thin stocks. Where in maize will inevitably underpin the value of reaching even higher levels. For coarse grains many Asian and other maize consumers will spring wheat component (about 17.4m
the US crop will end up will only be answered wheat and other cereals as alternative feeds. and soyabeans there is certainly a case to be be interested in this season’s large supplies tonnes) similar to last year’s. Canadian
when the combines have rolled, starting in A similar situation for the US soyabean crop made for an ongoing bull market, provided of sub-par quality wheat from the Black Sea quality is expected to be much better
September, and may not be fully clear until late has kept a firm undertone beneath the market demand holds up in these economically- region and other suppliers who have suffering than from last year’s crop with harvest
in the calendar year. At this stage, the official for oilseed meal. Under the same planting/ straitened times. Wheat is plentiful but its value quality downgrades of their milling wheat crops weather recently looking promising –
figure of 317m tonnes will be influenced from wet harvests. so more high grade wheat should be
is little more than 1m by how the feed Despite the constant increments being available for export to European and
above last year’s and commodities made to world crops, wheat prices embarked other customers.
about 26m tonnes less perform and but the on a renewed rally in August partly linked to The other area of concern, is next
than analysts hoped amount of quality concerns about North American and German year’s US hard red winter wheat crop
for earlier in the year grain available. Maize quality supplies but probably influenced far – the biggest component in wheat
and could yet shrink does need to rebuild more by fresh support from ‘outside’ investors expor ts from the world’s biggest
further if the USDA stocks but may not – chiefly speculative funds covering heavily wheat exporter. Over the past season,
decides, as markets now be able to sold ‘short’ positions on the futures markets. unusually large exports of these grades,
expect, that its has star t that process
over-estimated until the next US Table 1: IGC crop estimates (main suppliers)
planted acreage. crop is harvested
2008 2009 2010 2011F
The good news in last quarter 2012.
is that, so far, the Soyabeans and other
world maize output oilmeals will look to EU 150.7 138.3 136.8 137.5
for ec a s t r e mains Latin America to
CIS 117.3 113.6 82.3 107.6
about 31m tonnes higher than last season’s and growing weather stresses as maize, the soya keep supplies up and prices under control –
would still be a new record 850/860m amid crop estimate has already shrunk over the so any weather problems in the latter region Inc Russia 63.8 61.7 41.5 57
bigger and/or better than expected crops last two months by about 5m tonnes to 84m, will certainly find markets sensitive. Ukraine 25.9 20.9 16.8 21
in Brazil, Argentina, the EU, and Ukraine – about 6m less than last year’s crop and equal Kazakhstan 13 16.5 10 15
all the big alternative sources to the USA.
However, amid a smaller US sorghum crop
to about 4.8m tonnes less soyabean meal. This
is important in the context of world oilmeal
Main commodity highlights USA 68 60.4 60.1 56.5
and an inadequate recovery in global barley supplies – to which soya normally contributes since our last review Canada 28.6 26.8 23.2 24
production this year, a disappointing US maize about 70%. However, the situation is not quite Australia 21.8 22.2 26.6 24.8
crop still leaves a balance of fairly tight coarse as bad as this might suggest. World stocks of Wheat – plenty of wheat but Argentina 8.4 8.8 14.7 13
grain supplies, putting increased onus on soyabeans are large, thanks to last spring’s
wheat to meet growth in global feed demand. big Latin American crops, and can be drawn
less quality milling? India 78.6 80.7 80.8 85.9
(Wheat is expected to supply 15m tonnes of down to supplement crush. There is also LATEST estimates from the International
this growth in 2011/12 co pared with 10m for considerable leeway in the surplus implied Grains Council confirm much larger than In September so far, the trend has reversed as in effect, helped save the day for many
coarse grains in total. between estimated soyabean output and expected wheat crops in Russia, Ukraine, the global wheat supply position has improved foreign consumers when Black Sea
As said, the US maize crop story is not crush, (the bulk of which is usually assumed Kazakhstan, the EU and Canada, putting the and the US and Euro-zone economic crises wheat supplies ran short. However,
played out yet. It could yet turn out better to go to food/direct feed uses or stocks). world total 26m over last year’s. If the highest spooked speculative investors out of the traders are worried that a prolonged
than the pessimists fear if the US ‘yield-hit’ Last season it was 40m tonnes; this season trade and semi-official national estimates for futures markets. As we write, the Chicago drought in the southern Plains will
from poor pollination has been over-rated. it could shrink to about 25m, helping crush some of these countries are correct, we can market is about 10% off its mid-August highs. prevent many farmers from sowing
There are also some mitigating factors on continue to expand to meet an estimated expect that total to rise further in the coming European milling wheat futures are down by this crop in the early autumn. The past
the demand side of the market months, possibly put ting only 4% from their late-August peaks due to year’s HRW output had already declined
that may held keep cereal the crop ahead of 2009’s the weakness of the Euro. by about 22% as farmers switched to
feed costs under some sort of (estimated at 679/684m by the There is a genuine concern about US spring other, more promising crops. Even if
control. US exports, feed and IGC and USDA respectively). wheat supplies. The crop was planted late amid the US cuts HRW exports in 2011/12
ethanol consumption of maize World wheat consumption wet weather and harvest acreage estimates by about 29% as the USDA currently
all appear to be slowing down is expected to soar by 20/22m keep declining. Current estimates (which predicts, pipeline stocks of this grade
quote sharply in response to tonnes, much of which will be could shrink further in coming weeks are for could shrink by almost 30% by next
tight supplies, high prices and down to increased feeding in a crop of 12.9m tonnes (v last year’s 15.5m) June. An even smaller crop then would
the general economic malaise place to tight and expensive and with lower starting stocks, a 17% drop imply much tighter supplies of HRW
affecting the US, European and maize. This is quite a shift from in total supplies to 18.7m tonnes. However, than the market has grown used to.
global feed and fuel markets. the position of the past few the US is only expected to use about 7.5m Does this matter so much in a year
This has already resulted in the years (see chart), when feed of its own spring wheat with a similar amount when the Russians and others will hike
US going into the new next use of wheat stagnated, even going to export. Demand is down from last their export potential by far more? At
season with slightly higher than fell year-on year. Globally, feed year because US millers are using more hard this stage the forward futures markets
expected carryover stocks. demand for wheat is currently red winter wheat (from a particularly high are quite bullish still, the Chicago soft
Demand for maize is expected seen by the USDA rising by quality crop this year) while foreign buyers are red winter wheat contract quoting
to remain flat or falling across these sectors growth of 4% (about 8m tonnes) in world soya 15m to a 21-year high of 130.1m tonnes. taking a lot less US wheat overall, switching prices more than 10 % higher into
in 2011/12. Even so, by the close of the new meal demand. Against that, however, supplies Europe itself is predicted to use 56.5m tonnes to other cheaper origins, especially the Black mid-2012 (though it would not be
season, US and world ending stocks of maize of some alternative oilmeals – especially of wheat this season, 4m more than in 2010/11. Sea suppliers. the first time by any means, if futures
will decline to rather risky low levels. That rapeseed, the EU’s principal home-grown Demand from this sector is also seen rising in Strength in US hard wheat prices has also ‘price-revelation’ proved wide of the
alone suggests continuing interest from the oilseed, will be relatively tight after a smaller the former Soviet countries (+3.2m tonnes), been undermined somewhat by Canadian mark). For the near term, though Russia
speculative community, which could make than expected harvest. the USA (3m) and China (4m tonnes). It officials issuing a surprisingly high crop continues to make all the running in
maize costs reluctant to backtrack from their As mentioned above, the speculators have would not be surprising to see the final world estimate of 25m tonnes about 2.5m more pricing of wheat on the world export
32 | September - october 2011 Grain &feed millinG technoloGy Grain &feed millinG technoloGy PREVIOUS PAGE NEXT PAGE September - october 2011 | 33

4. markets, undercutting the US and Europe expect all three of the main regional supplies KEY FACTORS & QUESTIONS
by about $10/20 per tonne (and at one to try to cement their return in the wheat
point as much as $30/40) to win the lion’s export markets. All had ambitious export FOR THE MONTHS AHEAD
share of non-routine export tenders. So far, expansion plans before last year’s weather Final quality outcome and volumes for
neighbouring Ukraine and Kazakhstan, also problems and all have invested heavily in North American, German and, late in the
with far larger crops this year, have taken a infrastructure to facilitate these – often in joint year, Australian/Argentine breadwheats
lower profile in export markets, concentrating ventures with multi-national grain and agri- Northern hemisphere planting/weather this
www.ipeweek12.org | www.ife12.org
on bringing their crops in and, in Ukraine’s business companies who will want to see some autumn – will the US get rain in time for hard
case, still hampered by the tangle of red tape return. For these reasons, it would not be red winter sowing?
that was imposed to control outflows of grain surprising to see combined regional exports Russian and other CIS export strategy. Will
during the Russian and other regional crop easily reaching or even exceeding the 32.5m they continue to market aggressively – or will
failures. However, we can expect both of tonnes forecast by USDA. Last season, these they (Russia especially) put more into stocks
countries supplied after last year’s crop scares? How much milling
just 13.6m compared as opposed to feed wheat can the Ukraine
with 2009/10’s 35.8m export?
GLOBAL MARKETPLACE
and 2008/09’s record US domestic & world import demand for
37m. feed wheat – will it continue to increase if
Not to be maize supplies tighten?
overlooked is
India’s retur n for Coarse grains – smaller than
FOR THE POULTRY AND FEED INDUSTRIES
the f ir s t time in
several years as a
expected US maize supply
major world wheat The USDA’s September estimates had been
expor ter, initially keenly awaited by grain markets on both sides
allowing about 2m of the Atlantic as one of the main arbiters of
tonnes. Adding all feed supply and pricing in the months ahead. In
these increases in the event, the all-important US crop estimate
supply to the world turned out just below average trade guesses at
total cer tainly 317.4m tonnes – 11.4m lower than last month
mitigates the impact and only 1m more than last year. However
Russia’s neighbours to be keen competitors of expected lower supplies from the US this was heavily offset by cuts of 7.6m tonnes
for exports in the months ahead, helping to and the European Union. Even here the in US consumption and 3m tonnes in exports.
restrain wheat prices on world and European news has been improving in the past two USDA thinks that corn prices of $7/bushel
markets - although with some caveats. Much months as the EU-27 crop total has jumped (about $276/tonne) will cut use across the
of the Ukrainian crop is thought to have been back to about 136/137.5m tonnes – slightly board within the US itself – not only in animal
severely downgraded by wet weather and ahead of last year’s. This is an incredible feed but even in the ethanol fuel sector, for
fit only for feed rather than milling (though turnaround after some jeremiahs were the first time in several years.
presumably a lot of the crop can be blended forecasting possible 20/25% yield losses at At the same time, non-US maize output
up with some of the more expensive North the height of the early summer droughts was raised by 4.8m tonnes, leaving world
American quality wheat). There has also been and heatwaves. Although the two biggest total production only 6m tonnes smaller than
talk in the trade of Russia having a more finite producers, France and Germany, have forecast in August and still almost 31m tonnes The 2012 International Poultry Expo • The World’s Largest Poultry and Feed Technology Exposition
supply of good quality wheat than markets seen smaller crops, output is up in Eastern bigger than last year’s. Against that, world and International Feed Expo will be • Over 20,000 Industry Leaders from Over 100 Countries
have been assuming after its early-season Europe, Spain and the UK. demand, is seen rising by just 18m tonnes, held January 24 – 26, 2012, and the • Over 14 Acres of Exhibits
onslaught on the export market, in a bid to Total EU wheat supplies will still be lower (7.3m less than in August). So while global week of the Expo has been officially • Exceptional Educational Programs Planned for IPE Week
recapture its tarnished reputation as a reliable, than last season’s because starting stocks of ending stocks at the end of 2011/12 (next
designated as “IPE Week” with an - International Poultry Scientific Forum
cheap supplier. Time will tell but, on past 11.7m tonnes were drawn down by about September) will still be historically tight –
emphasis on educational programs - Hatchery-Breeder Clinic
experience with the CIS countries, the old 4.5m to maximise exports during Russia’s things won’t be quite as squeezed as expected
adage ‘big crops get bigger’ has often been temporar y absence from the market. last month. rounding out the week-long event. - Pet Food Conference
true and of the supplies are there, we might However, exports are expected to drop back Maize futures initially rose in response to - Animal Agriculture Sustainability Summit
by about 6.6m the US crop forecast, implying many traders The Expo is shifting to a TUESDAY, - Workshops on Safety and Environmental Issues
in 2011/12 and think it will shrink further as the USDA adjusts WEDNESDAY, THURSDAY format to - Symposium on Egg Production
impor ts to rise acreage, if not yields, in later estimates. The increase the education programs - Pre-Harvest and Food Safety Conference
by 3m tonnes, Department is still counting fields that were available to attendees. - Executive Poultry Outlook
leaving a slightly planned for corn and prevented by wet
higher stock at weather, although some analysts think it has
season’s end next made allowance enough for these in its current
July 1. Indeed, so estimates. Good yields from early harvested
far this season, fields in September meanwhile suggest that
impor ts are the losses from poor pollination during a hot
actually exceeding July might have been exaggerated although the
expor ts, putting earliest planted fields were always expected
fur ther restraint to do better with a longer growing period.
on domestic EU In the same vein, not all the US trade
cereal prices. believes demand will be as low as the
JANUARY 24-26, 2012 | GEORGIA WORLD CONGRESS CENTER, ATLANTA, GEORGIA USA
34 | September - october 2011 Grain &feed millinG technoloGy

5. News September - October 2011 NEWS
Flush Mounted Moisture Sensor
for Chutes, Conveyors and Mixers
for some upward adjustments. World
soya supply is boosted by larger than
usual carr yover stocks from last season
in Latin America – about 9.5m tonnes Hydro-Mix VII
more than a year ago. This relatively
good overall supply is expected to allow
world soyabean crush to still rise by about
10m tonnes in the coming season, equal
to about 8m tonnes more soyabean meal.
The supply outlook for other oilmeals is
mixed – more cottonseed and sunf lower
meal and, by supplementing this year’s
smaller output with car r yover s tock s
from las t year, fair ly s table r apeseed
meal supplies. Europe will be far more The new Hydro-Mix VII provides accurate and cost effective moisture
dependent on rapeseed impor ts after a control in feed meals and pellets, grain, cereal and pulses:
USDA thinks in 2011/12 – especially if by in 2011/12 by slowing demand growth. disappointing harvest here. This does have
prices star t to drift back and crank it up That means keeping prices high enough the potential to push up prices although • Digital technology with precise linear output for easy integration
again. Time will tell. to ration demand although pundits will the brunt of the impact will be on canola • Wide moisture measurement range
In Europe itself, the maize crop is one doubtless continue to argue in the months oil consumers as rapeseed meal tends to • Suitable for chutes, silos, mixers or conveyors
of the biggest ever after good summer ahead where the ‘equilibrium’ price lies. One follow the soya meal market. Overall, the • Choice of 3 measurement modes
rains boosted yields. The USDA boosted thing is clear, however. These relatively low supply increase for oilmeals should be able • Not affected by dust or colour
its forecast by 1m tonnes in its September stocks make it imperative for the US and to approximately match the anticipated • Temperature stable
estimates to 61m but French analyst Strategie other coarse grain producers to come up rise in world demand without the need
Grains thinks another 700,000 can be added with a better crop next year and any weather for much fur ther price-rationing.
to that figure, putting it 5.8m tonnes over scares will find markets very sensitive. Soyabean prices had been f ir m all
last year’s and roughly in line with expected summer on the factors mentioned above enquiries@hydronix.com
consumption.
Maize crops may also be better than
KEY FACTORS IN THE MONTHS but are dipping a bit as we go to press as
the latest round of economic jitters sparks www.hydronix.com
expected in other supplying countries. AHEAD fresh doubts about the strength of world
Argentine estimates are running as high commodity demand, especially related to
as 30m tonnes compared with the USDA’s - The final size of the US maize crop – smaller fuel and meat consumption. Estimates for
latest forecast of 27.5m and last year’s 22m or bigger than the USDA September top soya consumer China’s soya demand GFMT quarter page vertical 105 x 147 plus 3mm bleed.indd 1 11/01/2011 13:54:46
tonnes. The Argentine government has number? have already been scaled back a bit although
already announced a big jump in its expor t - China’s maize ‘deficit’ and its attempts to the rate at which its planners expect pork
allocations to about 20m tonnes compared fill that with imports – markets get jittery and poultry production to expand suggests
with last year’s 15m. Third largest exporter when China moves it will remain a potential bullish force in
Ukraine also upped its maize crop forecast - Global economic problems – not good for this market.
to 20m and expor ts to 12m versus the consumer confidence, so negative for meat Wi th the L atin A mer ican planting
USDA’s forecast of 10m and last year’s and feed demand and a potential restraint season approaching, weather there will
5.5m tonnes. on grain & oilseed prices be keenly watched for its potential to
Among the other coarse grains, world - Speculators’ interest in commodities – is push up prices. There is also some debate
barley output is up by about 8.5m tonnes the party over? Probably not quite yet. about whether farmers there will sow
this season but for the second year - Ethanol competition for maize supplies more maize instead of soya and whether
running, demand will out-run supply (by – amber signals for endless government the ‘La Nina’ weather phenomenon might
4.5m versus last season’s 11.2m tonne subsidies and demand growth does seem cause troublesome dr y conditions. Both
shor tfall), so world stocks will continue to to be slowing. But shortages of sugar-based should become clearer in the nex t few
decline. European output is similar to last ethanol from Brazil are tightening the world months.
year’s when it ran about 3m tonnes shor t market for green fuels, supporting their
of demand. However, EU consumption is
expected to drop back in 2011/12 as some
value. That could turn out more bullish for
maize going forward
KEY FACTORS IN THE MONTHS
feed demand switches over to the more AHEAD
abundant wheat crop. Oilmeals – soya less tight than
Sorghum output on the other hand is - Final US soya planting estimates and weather
down by 5m tonnes this season and will
thought in the next two months
barely match expected demand. Adding in Oilseed meal prices were star ting to - Is China, the engine of world crush growth,
the other coarse grains puts the world total look fr isk y in the summer months as slowing down?
for this cereal group about 11m tonnes
behind demand. The resultant drawdown
concer n built that the mar ket leading
US soyabean crop would turn out much
- How much soya will the Latin Americans
sow this autumn?
Tailor-made Solutions
in world stocks will leave them at around smaller than expec ted af ter weather - Did Canada meet its rapeseed planting
13% of consumption – about seven weeks’ problems. Cer tainly this crop will be targets & is the crop there under or over-
supply. well down in 2011 – by about 6.6m tonnes rated?
Overall, the outlook for coarse grains or 7% . However, the situation there does - EU winter rapeseed plantings - up or down
www.mysilo.com
suggests the markets may just about scrape now seem to be stabilising, even allowing for 2012?
36 | September - october 2011 Grain &feed millinG technoloGy Grain &feed millinG technoloGy September - october 2011 | 11
AD_Mysilo_90x132mm.indd 1 30/09/2011 16:42

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Article reprints
All Grain & Feed Milling Tecchnology feature articles can be re-printed as a 4 or 8 page booklets (these have been used as point of sale materials, promotional materials for shows and exhibitions etc).
If you are interested in getting this article re-printed please contact the GFMT team for more information on - Tel: +44 1242 267707 - Email: jamest@gfmt.co.uk or visit www.gfmt.co.uk/reprints
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