76 / SEEDWORLD.COM JANUARY 2019 part of the 2000s when biofuels kicked in another 157 million metric tons of additional grain demand. Both of those took world grain production up, Basse noted. “In between these, seeding generally goes side- ways, he said. “We think we are on one of those sideways periods again, until we find the next demand driver going forward.” Cross Currents in World Grain For wheat, stocks are going in the right direction: We are actually using and utilizing more than we are producing, Basse said. In the case of world wheat exports, wheat trade has increased 93 million metric tons since 2008. Prior to that, Basse said there was no growth. “We are starting to see signs that that the agricultural market is plateauing or bottoming out,” Basse said. “If we look at the backbone of the wheat market (Russia, Ukraine and the European Union), they are just 22.5 days as measured by USDA.” Basse said the Black Sea tends to have five or six years of good weather and then an abnormality. “This year’s decline in Russia’s wheat production wasn’t all that big, but it did produce a drop of 15 million metric tons of wheat which was significant,” he said. “When I look at Russian wheat exports, they have been pushing wheat out the door like there’s no tomorrow. “Why? The Russian government sent some bad messages. They told farmers and wheat exporters that it might put embargoes on the wheat trade sometime after the first of the year.” Because of this, Russian farmers and exporters have been moving their wheat agressively, which is putting price pressure on the rest of the world market, Basse said. But there is end in sight. “Sometime between January and February and moving forward, those exports will dramatically drop because the wheat supplies are no longer within Russia or they are not available,” Basse explained. Exports are down dramatically in the EU due to droughts, he pointed out. “We are now down 32 percent from the prior year, and you can see the seasonality here,” Basse said. “The EU is using a lot of its wheat for feed because it just don’t have a lot of other hay, corn or fodder available for livestock. We see the EU being quite skinny in terms of wheat exports.” Looking back to other years when there’ve been tight world wheat export supplies, Basse said we normally see price relationships that start lower in June and then rally to a peak somewhere in February and March. “This year, because of the rally to export Russian wheat, this has been depressed,” Basse said. “But we are hopeful that in the first and second quarters of this year, U.S. and world wheat prices will start to lift.” Basse said that trade out of Chicago could make it back to $5.80 or $6.20 a bushel from the $5 a bushel level that currently stands. Tightening Up Wheat and corn are normally thought of seper- ately, but Basse said when talking stock-to-use ratios, it is important to take both of them into account. “When I look at both of them combined, we are now at our lowest level, at 15.1 percent, going back to 1996,” he said. The EU’s corn imports have been well above the USDA’s forecasts. Basse said this year, the EU could potentially be the world’s largest corn importer, competing with Mexico for the top spot. “World corn trade, like wheat, is really doing well,” Basse said. He cautioned that: “You have to be careful with being overly bearish.” This year has seen record corn yields in Ukraine, China and the United States, which offset a drop in seedings that occurred last year, Basse said. Ukraine has surprised the world with its corn yields. Basse said its yield was somewhere around 103 bushels per acre, so marketers expect lots of upside potential there. Then, China’s new ethanol factories are driving global corn demand, Basse said, adding that the demand for corn will keep going up as China opens more production plants. “World stock-to-use ratios are the lowest they’ve been since 2012,” Basse said. “The world outside of China doesn’t not have any abundance of corn that is going to put price pressure on corn. This is that bottoming effort as we see it in terms of the world corn market.” SW Dan Basse is the president of AgResource Company and spoke at the ASTA 2018 CSS & Seed Expo in Chicago. “We are starting to see signs that that the agricultural market is plateauing or bottoming out.” — Dan Basse 61% of the world’s corn and wheat stocks come from China 25% is the percentage of U.S. trade tariffs on China. 102 million metric tons of corn was auctioned off by the Chinese government. 2021 is the year expected for China to return as a world corn importer.