The International Grains Council (IGC) has cut its forecast for world total grains production in 2017/18 by 11 million tonnes, month-on-month, to 2,038 million tonnes, a drop of 4% from the previous season’s record due to overly dry weather conditions in some producing countries.
Both harvested areas and average yields are expected to be lower year-on-year, the IGC said in its latest monthly report sen by Indoasiancommodities this week.
“Adverse dryness continued in a number of countries over the past month and rains would likely be too late to reverse damage in some areas,” the report said.
Although record opening stocks will help to cushion the fall in output, overall availabilities are expected to shrink by about 2% year-on-year. In the wheat sector, there are particular concerns about a tightening outlook for supplies of premium grade milling wheats, it added.
With grains consumption expected to stay at a high level, a 9% retreat in stocks is envisaged at the end of 2017/18, to a three-year low of 478 million tonnes.
Maize accounts for most of the drop by 34 million tonnes, as carryovers are drawn down in the USA and China. Barley is expected to see a relatively large reduction as well, to the least in five seasons, while wheat inventories in the major exporters could be the smallest for four years. Only a modest drop in grains trade is projected, as a possible fresh peak for maize almost offsets falls for wheat, barley and sorghum.
Because of overly dry weather, including in North America, the EU and Australia, the outlooks for global corn, wheat and barley harvests are revised lower. With higher estimated opening inventories and a slight cut in projected demand, the figure for grains carryover stocks is only a little smaller month-on-month, but at 478 million tonnes is now seen contracting by 45 million tonnes year-on-year.
- Overly dry conditions have impacted grains production prospects in some countries and output is seen falling by 4% in 2017/18.
- Amid smaller supplies and strong demand, grains stocks are predicted to contract by 9%.
- Only a modest retreat in grains trade is envisaged as potentially record maize shipments partly offset declines for wheat, barley and sorghum.
- Despite area gains in key producers, a pullback in yields is likely to result in a 2% fall in global soybean output in 2017/18.
- World rice stocks are projected to tighten in 2017/18 on a contraction in the major exporters, led by Thailand.
The outlook for rice supply and demand in 2016/17 is broadly unchanged from June, traded volumes seen rising by 7% y/y on firm demand from Asian buyers in particular. Projections for the following season are mostly maintained, with end-season carryovers set to fall slightly as a 12% drop in major exporters’ stocks outweighs likely accumulation in China.
Owing to a huge global outturn swelling supplies, 2016/17 end-season soyabean stocks are anticipated to expand by almost 40%, to an all-time high of 43.5 million tonnes, mostly on heavy accumulation in the USA and Brazil. In 2017/18, world area gains of about 5% are predicted but, due to a potential retreat in average yields, production is seen falling by 2% year-on-year, to 345 million tonnes, albeit still comfortably the second biggest crop on record.
With exporter shipments data indicating continued firm demand, global rice trade in 2017 is seen up by 7% year-on-year, including significantly larger sales to Bangladesh, Sri Lanka and the Philippines. Tied to area growth in Asia, notably in Thailand and India, 2017/18 output could edge up to a high of 486 million tonnes.
Population increases are set to push food use to a fresh peak and end-season carryovers are likely to fall; while inventory accumulation is anticipated in China, major exporters’ stocks are seen contracting by 12% year-on-year. Partly reflecting government old crop sales, Thailand’s stocks are projected to be down by almost 30%, to a nine-year low. Trade in 2018 is predicted to be up modestly, with volumes in line with the record of four years earlier.