The Iran war has disrupted supplies of both items to Australia, one of the world’s biggest grain exporters which relies on imports to meet its needs.

That will spur farmers to plant less wheat, which is hungry for fertilizer and earns a low price, and more canola, which brings the best financial returns, the Grain Industry Association of Western Australia said in a report.

WHY IT MATTERS: Australia is one of the world’s major grain exporters. High fertilizer prices may lead to lower yields in some grain growing regions around the world as farmers reduce fertilizer use or switch to less hungry crops.

The extent of land planted with wheat is set to fall 14 per cent to 3.68 million hectares (9.1 million acres) from last year’s 4.3 million hectares (10.6 million acres), it added.

Barley area should grow one per cent to 2.06 million hectares (5.1 million acres) from 2.04 million hectares (5 million acres), and canola area is set to expand 16 per cent to 1.99 million hectares (4.9 million acres) from 1.71 million hectares (4.2 million acres).

“Total area planted will be down from the record 9.45 million hectares (23 million acres) planted in 2025 due to the potential of reduced profitability,” GIWA said, referring to all winter crops including oats, lupins and pulses.

Many farmers are considering sharp cuts to sowing programs because of high costs and uncertainty about fuel and fertilizer supply but the planting season leaves them enough time to delay those decisions, if necessary.

“At this early stage of the season, most growers are sticking to subtle adjustments in cropping plans rather than making wholesale changes and are waiting to see how the seasonal and political climate unfolds,” GIWA said.

“The poorer performing paddocks will be left out to fallow area or replaced by a pasture or grain legume if it fits the rotation.”

Subsoil moisture reserves in most areas of Western Australia should help crops to grow, it added.

— Reporting by Peter Hobson

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Extreme weather events such as early spring frosts, floods, and summer heat have affected this year’s harvest outlook in some key producing areas of Russia, the world’s biggest wheat exporter.

“Despite the extremely challenging climatic conditions of 2024, the grain harvest forecast remains at 132 million tons,” Patrushev told an industry meeting. This is down from a record 158 million tons in 2022 and 145 million tons last year.

The agriculture ministry officials have said earlier that the current forecast can be revised depending on the progress of the harvest.

Patrushev said farmers in 55 regions of Russia have begun harvesting the new crop, and the pace of harvesting is twice as fast as last year, with 40 per cent of the grain and legume fields already harvested and almost 64 million tons collected.

—Reporting for Reuters by Gleb Bryanski

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Overall, the agency’s projections for next year were either steady or lower than what the trade expected.

U.S. wheat production for 2024-25 was estimated at 1.858 billion bushels, which was below average trade guesses but slightly above the 1.812 million tonnes grown in 2023-24. Average wheat yields were forecast to increase slightly on the year at 48.9 bushels per acre.

Exports for 2024-25 were estimated at 775 million bushels, up from 720 million in 2023-24. Ending stocks for 2023-24 were projected at 688 million bushels, down eight million from the trade’s average estimate, while those for 2024-25 were at 766 million bushels, down 20 million from trade expectations.

Global wheat production for 2024-25 was pegged at 798.19 million tonnes, slightly ahead of 787.72 million in 2023-24. World ending stocks for 2023-24 were set to be 257.8 million, 900,000 above the average trade estimate, while those for 2024-25 were 253.61 million, down 3.76 million from the average trade guess. Canada was set to produce 34 million tonnes of wheat in 2024-25 with ending stocks at 3.12 million.

New crop U.S. corn production was estimated at 14.86 billion bushels, slightly down from the average trade guess but 482 million lower from 2023-24. Ninety million acres were projected to be planted in 2024-25 with an average yield per harvested acre of 181 bu./ac.

U.S. corn exports were expected to rise 50 million bushels to 2.2 billion in 2024-25 to go with ending stocks at 2.102 billion. The latter figure is down from the 2.284 billion projected by the trade but up from 2.022 billion in 2023-24.

Global corn production for 2024-25 was estimated at 1.220 billion tonnes, down from 1.228 billion the previous year. World carryout for 2024-25 was pegged at 312.27 million tonnes, relatively steady from the year prior. Brazilian corn production for 2023-24 was set for 122 million tonnes by the USDA and for 127 million in 2024-25. The Argentine corn crops were projected to be 53 million tonnes in 2023-24 and 51 million in 2024-25.

Soybean production in the U.S. was projected at 4.45 billion bushels, close to the average trade estimate and up 285 million from 2023-24. Planted acres were expected to total 86.5 million acres for 2024-25 with an average yield per harvested acre of 52 bu./ac.

U.S. soybean exports for 2024-25 were set to increase by 125 million bushels from the previous year at 1.825 billion. Ending stocks for 2024-25 may rise by 105 million bushels from the previous year at 445 million, with figures for both years close to trade estimates.

World soybean production for 2024-25 was pegged at 422.26 million tonnes, up from 396.95 million the previous year. Global ending stocks for 2024-25 were set for 128.5 million tonnes, up 7.63 million from the average guess, while those for 2023-24 were slated to be 111.78 million, slightly below the average trade estimate.

The estimated Brazilian soybean crop was at 169 million tonnes for 2024-25, up 15 million from the previous year. Argentina’s soybean crop was expected to be 51 million for new crop, up one million from 2023-24.

—Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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The world’s second-biggest corn grower reported a record corn crop of 288.8 million metric tons last year but continues to aim for larger output amid rising tensions with some trade partners, climate-related disasters and military conflicts.

China aims to boost grain production by 50 million metric tons by 2030, with a focus on soybeans and corn, although state media have reported production hitting a bottleneck.

Good prices and government subsidies have encouraged farmers to expand winter wheat and rapeseed planting, said Pan Wenbo, the ministry’s director-general of cultivation management. These crops are usually harvested around April to May.

“I went to the main producing areas of Hebei, Shandong, Henan and Anhui, indeed the wheat fields are healthy, robust… good seedlings lay the foundation for a good harvest,” Pan said at a press conference.

The area of winter rapeseed planting is expected to increase by more than 2 million mu (133,333 hectares), extending last year’s rise, he added.

The ministry said China’s consumption of agriculture products will continue to recover, with demand driven by a rebound in the tourism and restaurant sectors.

Demand momentum will extend as the economy bounces back more, said Lei Liugong, director of the agriculture ministry’s market and information department.

However, demand from the manufacturing and wholesale sectors has not recovered to expected levels, Lei added.

—Reporting for Reuters by Mei Mei Chu and Chen Aizhu

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The agriculture ministry approved the domestic production of six more varieties of genetically modified corn, two of soybeans and one of cotton, and another two of gene-edited soybeans, a notice on the ministry’s website said.

The planting zones for most of the varieties were expanded from “ecologically suitable” areas to the whole country, according to the notice. Previously, some corn varieties were restricted to the Northern or Southern producing areas.

For imports, the ministry approved gene-modified insect- and herbicide-resistant soybean variety, DBN8002, developed by Beijing Dabeinong Technology Group Co Ltd 002385.SZ, which had been licensed for planting in Argentina since 2022.

China also approved a Corteva Inc CTVA.N herbicide-tolerant corn variety DP202216.

The new approvals extend for five years, effective from Jan. 2, 2024.

As the world’s largest importer of soybeans and corn, which GM varieties China approves can have huge implications on the planting size beyond its borders, Even Pay, agriculture analyst at Trivium China, said. “Farmers don’t want to plant varieties if China can’t buy them.”

With Chinese firms now allowed to develop and sell GM seeds, it is likely that Beijing will be a lot more forthcoming with import approvals, making GM seeds more attractive and creating a significant advantage for Chinese seed companies overseas, Pay said.

China, the world’s second largest corn grower, has moved cautiously on deployment of technology for genetically modified organisms (GMO), but is steadily opening up to the cultivation of GMO crops.

In December, China issued licenses for a first batch of 26 companies to breed and sell GM corn and soybean seeds domestically after years of pilot testing.

“We can expect the scope of planting to increase over the next few years and eventually become very significant,” Pay said.

For now, these crops have yet to enter the industrialization phase as it still needs to go through variety validation, production, operation and other processes which involves government licenses, Zhejiang Xinan Chemical Industrial Group Co Ltd 600596.SS, which received approvals for four varieties, said in a stock filing.

Market penetration of gene-modified crops could reach 85% in three to five years once the industry is fully commercialized, GMO developer Beijing Dabeinong Technology 002385.SZ said in a filing this month.

China is pushing for higher domestic crop yields this year to ensure food security and wants to reduce its reliance on soybean and grain imports, now at more than 100 million tonnes a year.

–Additional reporting for Reuters by Liz Lee and Beijing newsroom.

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The London-based IGC released its first monthly report of the new calendar year on Jan. 11, listing total grain production up from its November call of 1.872 million tonnes. The IGC does not issue reports for December.

Among the changes the council made for January, production increases included Australia from 37 million tonnes to now 39.3 million; Canada up from 55.5 million to 59.1 million; and China now at 434.7 million compared to 426.4 million previously.

Also, the IGC upped its projection on total grain ending stocks from 584.9 million tonnes to 590.2 million.

Global wheat production for 2023/24 was pushed up to 788.3 million tonnes from November’s 786.6 million. Among the notable changes to output were Australia raised 1.1 million tonnes at 25.5 million, and Canada from 29.8 million to now 32 million.

World wheat ending stocks were nudged up from 264 million tonnes in the IGC’s previous report to now 265.6 million.

Global corn output for the current marketing year was raised as well, from 1.223 billion tonnes in the IGC’s November estimates to now 1.230 billion.

There were production increases for China from 280.6 million to now 288.8 million tonnes, and Ukraine from 28.8 million to 30 million. These were offset by a cut to Brazil from 124 million tonnes to 119.7 million.

With the higher corn production, ending stocks were raised two million tonnes at 286.8 million.

The IGC reduced 2023/24 world soybean production from 394.8 million tonnes in November to now 392.4 million. Argentina was boosted from 44 million tonnes to 48.5 million, Brazil was cut from 160 million tonnes to 153.5 million.

Despite the drop in soybean production, the IGC raised ending stocks from 62.2 million tonnes to now 66.1 million. A large part of that came with increasing the carry-in from 53.9 million tonnes to now 57.3 million.

The next monthly report from IGC is scheduled for Feb. 15.

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 Total world wheat production in 2023/24 was pegged at 787 million tonnes by the IGC, which would be up by two million from the October estimate but still below the 804 million tonnes grown in 2022/23. If realized, the world wheat crop would still be the second largest on record.

 Of the total, Russian and Ukrainian wheat production estimates were both raised slightly from the October estimate to 90.0 million and 28.7 million tonnes respectively. Wheat production in the European Union was raised by 800,000 tonnes from October, to 133.2 million tonnes, while Argentina’s crop was down by 900,000 on the month at 14.7 million tonnes.

 World wheat ending stocks were forecast at 264 million tonnes, up by one million from October but below the 281 million tonne carryout in 2022/23.

 Global corn production was raised to 1.223 billion tonnes, which compares with the October estimate of 1.219 billion tonnes and the year-ago level of 1.161 billion tonnes. The corn carryout was estimated at 285 million tonnes, up by two million from October and by 10 million from the year ago.

 World soybean production is forecast to be up by seven per cent on the year, hitting a record of 395 million tonnes. That would be up by two million tonnes from the October estimate. World soybean ending stocks were left unchanged on the month at 62 million tonnes, which would be up by eight million from the previous year.

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