Production is the starting point to supply and demand analysis which is used to determine fair market value of a commodity. In the US, market prices are influenced during the period when commodities are developing, and in the case of wheat development is monitored over a long period from September when it is planted until the summer when it is harvested, with the key yield-determining period being the spring months. In the case of soybeans world production is rather evenly split between the northern and southern hemisphere with the key market period occurring in the summer in the north and during the January to March period in the south.
Key facts about acreage and production in the crops market
- World corn and soybean production have each increased about 30% over last 10 years, world wheat production increased 20%, and technology continues to push production efficiencies around the world
- The US is the largest corn exporter, but due to growth in Russia and South America corn production US could soon be the world’s residual supplier.
- Brazil is the largest soybean exporter at over 75 million tonnes annually, accounting for half of the world soybean trade, 50 percent% than US exports.
- China is the world’s largest soybean importer, purchasing about one-quarter of the world’s soybean production each year. China’s soybean imports have doubled in the last 10 years, with nearly 100 million tonnes expected to be imported in the next marketing year.
- Acreage and production is affected by price, with prices at time of planting determining changes in planting patterns, then it influences prices when assessing productivity compared with market expectations.