Record Aussie wheat crop, higher levels of maize in feed in Africa as use of compound feed rises

By Jane Byrne contact

- Last updated on GMT

© GettyImages/nicexray
© GettyImages/nicexray

Related tags: Africa, Compound feed, Maize, Feed wheat

Demand for Australian wheat from Asia is expected to gain momentum in coming months, with the 2020/21 Australian crop estimated to be the largest crop in the past four years.

Approximately 1.5Mt of wheat is reportedly scheduled to leave Australia in December, destined mostly for China, Vietnam and the Philippines, according to the latest grains market report from AHDB.

Meanwhile, Chicago maize futures, said the UK team, gained more than 3% last week – that was the biggest weekly gain since the week ending 28 August. With robust export demand and lower than expected stocks supporting US maize prices, the market is trading close to a seven-month peak, they reported.

Global wheat and maize consumption

Maize is playing an increasingly important role in animal feed, both globally and in the UK, found the analysts in their newly published global wheat and maize consumption overview​. 

“Of late we have seen a large proportion of demand-pull inflation in maize values, driven by the high volumes of maize imported by China.”

The largest growth in maize consumption for animal feed is seen in the EU, with maize displacing the smaller wheat crop. Growth in consumption of the grain is also seen in the US.

The hike in maize use in feed in the EU, however, is potentially a short-term reaction to restricted wheat availability, said James Webster, senior analyst, AHDB cereals and oilseeds market intelligence. 

He noted that a developing trend to watch in maize consumption for animal feed is the increased use of the crop in North Africa. “There has been an increased shift in recent seasons away from traditional grain consumption, to increased usage of compound feed. This has been specifically noted in Saudi Arabia, where the government is increasing the cost of barley, and incentivizing the use of compound feed.”

With the competitiveness of maize during late 2019/20 as the new crop developed, consumption of wheat for animal feed will have been pressured, he said.

The USDA estimate a year-on-year fall of 3.6Mt in feed wheat usage. The largest drop is seen in the EU, with a 5.0Mt fall year-on-year, reflecting the tighter supplies of wheat and increase in forecast maize production and animal feed consumption (+5.8Mt).

“With tighter wheat production the propensity to use wheat in feed is lower than it is for human consumption, as such human consumption is only expected to decline by 200Kt,”​ he remarked. 

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