- Because of poor weather, there are some risks to 2015/16 maize and soyabean crop prospects in South America.
- The outlook for 2016/17 grains is favourable, with total supply potentially reaching a new record.
- A further accumulation of grains stocks is projected. Trade is set to stay high, but will probably be down y/y.
- World soyabean production is tentatively seen little changed in 2016/17, while stocks could fall steeply on declines in key exporters and China.
- Although rice output could recover in 2016/17, global carryovers are likely to retreat further on an anticipated increase in uptake.
Total grain supply could hit a new record in 2016-17, the International Grain Council (IGC) said, as it raised its forecast for next season’s production, specially for the corn and wheat harvest.
The IGC expects 2016-17 grain production at 2.006 billion tonnes, a 9 million tonne increase from its previous forecast, made at the start of the month.
The IGC Report:
While forecasts for world total grains (wheat and coarse grains) supply and demand in 2015/16 are similar to the last report, concerns have increased over the past month about maize (corn) prospects in South America. Untimely rains are hindering the harvest in Argentina, while prolonged dryness has cut yield potential in Brazil., the IGC said.
It said beneficial weather is improving the outlook for wheat, including in the EU and Russia, while maize forecasts are raised for a number of countries. Total consumption is a little higher m/m and is seen expanding slightly y/y, to 2,000m t, second only to use in 2014/15.
The world stocks figure is lifted by 7m t, to 472m, up by 6m y/y, including a significant accumulation in China. Trade is placed marginally higher m/m, but is still 8m t down y/y, partly because of likely reduced shipments to China.
Reflecting the impact of poor weather in South America, notably in Argentina, the 2015/16-world soyabean production forecast is cut by 5m t, to 318m. Nevertheless, this is only fractionally short of the previous season’s record. Prospects for crops in 2016/17 are tentative.
But with output projected to be broadly unchanged y/y as consumption rises further, global carryovers could contract by 16%, to 32m t, the smallest in three years. Trade is expected to edge up to a high of 133m t on Asia’s expanding needs.
Forecasts for rice supply and demand in 2015/16 are little changed from before, with global inventories expected to fall by 11% on steep declines in key exporters. Centred on a recovery in Asia, including in India, the 2016/17-world rice outturn is projected at an all-time peak of 485m t, up by 3% y/y. However, due to smaller carry-ins and continued growth in food use, stocks are anticipated to tighten to an eight-year low of 94m t.
Some uncertainties remain about world total grains (wheat and coarse grains) supply and demand in 2015/16, largely linked to adverse weather for South American maize. Nevertheless, the season is still forecast to end with another significant stocks increase, adding to the safety net against any unforeseen crop problems in 2016/17.
In spite of strong demand, a further build-up of grains carryover stocks is envisaged at the end of 2016/17. Those in the major exporters are seen increasing to a seven-year high, while China’s could exceed 200m t for the first time since 1999/00. World trade is predicted to stay strong and is placed 5% above the average in the five years to 2015/16. However, volumes are seen dropping by 3% y/y, in part because of possibly reduced purchases of maize, barley and sorghum by China.
Global rice stocks are expected to tighten sharply in 2015/16, almost entirely due to depletion in the main exporters Thailand and India. The outlook for 2016/17 is tentative but, assuming weather is broadly favourable, especially in Asia, the world outturn could recover to a new peak of 485m t. Nevertheless, given an anticipated rise in food consumption, which accounts for the bulk of total uptake, carryovers are expected to again retreat, to 94m t, the lowest since 2008/09. Trade in calendar 2017 depends on crop outcomes and availabilities in Asian and African markets, but is expected to stay close to 42m t.