LONDON, ENGLAND — At 1.9 billion tonnes, the forecast for world total grains (wheat and coarse grains) production is increased by 18 million tonnes month-over-month, but is still down by 1% compared to last year’s record, according to the International Grains Council’s (IGC) Aug. 27 Market Report.
While much of this month’s upgrade is tied to larger than expected wheat and barley crops in the CIS (Common Wealth of Independent States) and the E.U., projections for U.S. sorghum and maize are also lifted from July. Following reports of worse than anticipated drought damage, estimates for maize in the E.U. and Ukraine and spring wheat in Canada are lowered from before.
Global consumption is seen 7 million tonnes higher than in July, at 1.9 billion tonnes, with use for human food, feed and industrial processing each expected at new records. Opening stocks are seen larger than before and, with not all of the growth in supplies absorbed by increased demand, the world carryover projection is raised by 12 million tonnes, to 447 million tonnes, up almost 1% year-over-year. Owing to upward revisions for maize and sorghum, world grains trade is forecast 2 million tonnes higher month-over-month. However, with imports of wheat and barley slowing, total grain shipments may decline by 2% year-over-year.
The projection of global rice output in 2015-16 is trimmed but, at 479 million tonnes, would broadly match the previous year’s record. Carry-in stocks are placed higher than in July and, with total use little changed, aggregate carryovers are lifted by 900,000 tonnes, to 96.9 million tonnes. Nevertheless, this would still equate to a year-over-year decline of 9% and be the smallest in six seasons, mainly on a drop in leading exporters. At 42 million tonnes, world trade is anticipated to remain high in 2016 on demand from buyers in Africa and Asia.
Reflecting an upgrade for the U.S., the projection of world soybean production in 2015-16 is raised by about 2 million tonnes, to 318 million tonnes, only fractionally below the previous year’s record. However, due to a reduction in opening stocks and an increased forecast for total use, aggregate end-season inventories are placed nearly 4 million tonnes lower than in July, albeit still up marginally year over year and a fresh record. Trade is lifted slightly to a new peak of 125 million tonnes, but the outlook is tentative given heightened economic worries in China, the world’s biggest buyer. With pressure from mostly favorable crop prospects compounded by concerns about the global economy, the IGC’s Grains and Oilseeds Index (GOI) fell by 5% month over month.
World total grains (wheat and coarse grains) production is forecast to be slightly smaller year-over-year. Although sorghum output is pegged at a near 20-year high and wheat, barley and oats harvests are forecast to show little overall change, reductions in both area and yields are seen resulting in a 3% contraction in the global maize crop. With a large carryover from the previous season, total supplies are projected to increase by around 10 million tonnes to a new all-time high.
Global consumption is expected to expand slightly, but with growth less pronounced when compared to recent averages. In contrast to the last few years, the rise in 2015-16 demand is forecast to be mainly driven by growing human food needs. While use for livestock feeding will also increase, staying at very high levels, smaller crops are likely to cap uptake in the E.U. and the U.S.
End-season grain stocks in 2015-16 (aggregate of respective local marketing years) are now placed at 447 million tonnes, up fractionally year over year. While carryovers of wheat, barley, sorghum and oats are expected to increase, maize inventories are seen retreating slightly from last year’s levels.
Trade in the year ending June 2016 is forecast to be down by 2% year-over-year. As China has recently been a heavy importer of feed stuffs, including sorghum, barley and dried distillers grains (DDG), traders are wary of potential changes to state support mechanisms, which could alter buying patterns. The 2015-16 world rice out-turn is seen broadly matching the previous year’s record, although prospects remain tentative, especially due to ongoing weather worries.
With population growth set to support a further expansion of uptake, global end-season inventories are projected to fall by 9%, to 96.9 million tonnes – the smallest in six years and almost entirely due to a contraction in key exporters. Trade is expected to remain high in 2016 on demand from buyers in Africa and Asia. Thailand’s volumes are seen surpassing those of India as it reclaims its status as the world’s biggest exporter.
Assuming bumper crops in leading producers, 2015-16 global soybean output is seen falling only fractionally from the previous year’s record, mainly on reduced yields. While consumption is likely to expand further, albeit at a slower rate, world carryovers are seen posting a gentle year over year rise. Within the total, major exporters’ stocks are projected to record a 16% year-over-year rise as accumulation in the U.S. more than offsets declines in Argentina and Brazil. Trade is likely to increase slightly, to 125 million tonnes, on growth in demand from China’s huge feed sector, but the outlook is highly uncertain amid deepening worries about economic prospects. Owing to disappointing crops in the E.U. and Canada, world rapeseed/canola output in 2015-16 is seen falling by 9% year-over-year.