Second largest total grains harvest in history forecast for 2017/18 – IGC

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The forecast for global total grains (wheat and coarse grains) production in 2017/18 is 5m t higher m/m (month-on-month), at 2,079m, down by 3% y/y (year-on-year), according to the International Grains Council (IGC).

It said in its latest report that most of the change from before is for maize, including an upward revision for the US crop.

“Increased feed/residual use (mainly USA, EU, Canada, Russia and China) absorbs part of the supply boost, and the figure for world carryover stocks is raised by 3m t, to 496m,” the report said.

  • The second largest total grains harvest in history is forecast for 2017/18.
  • Grains consumption is expected to be a record.
  • Amid lower supplies and strong demand, stocks are projected to fall for the first time in five seasons.
  • Led by increased maize buying, total grains trade is predicted at a fresh peak.
  • Global soyabean trade is seen rising by 4% y/y, to a new high, with China’s imports close to 100m t.
  • World rice trade could retreat slightly in 2018, largely on a potential reduction in shipments to Africa. However, at around 43m t, volumes would still be well above average

While this would be the first contraction in five years (-28m t y/y), inventories are expected to be the second largest ever. There are only minor adjustments for trade projections, with all grains trade still placed at a peak of 359m t, up by 2% y/y, led by the ninth annual expansion for maize in succession, the IGC said.

At 348m t, the 2017/18 soybean output forecast is unchanged from before and only fractionally short of the prior season’s record, the report said, adding that due to a higher figure for carry-in stocks, coupled with a cut to consumption, end-season inventories are lifted by 2m t m/m, to 41m.

“Nevertheless, this is still a y/y contraction of 9% as an expected drop in major exporters’ carryovers is only mildly offset by increases in other countries, such as China. In part reflecting an upgrade for the previous year, trade in 2017/18 is seen 2m t higher, at 153m, an annual gain of 4%. Although the prediction of exports by the USA is increased, Brazil is anticipated to remain the world’s biggest supplier.”

The IGC maintained its outlook for world rice production in 2017/18 is at 482m t, the 4m y/y fall stemming from potentially smaller crops in Asia.

“With uptake trimmed marginally, aggregate end-season carryovers are placed fractionally higher m/m, at 121m t, albeit still representing a slight drop y/y. While further stock accumulation is anticipated in China, this may be outweighed by reductions elsewhere, with major exporters’ reserves seen falling by 14%, to a decade low.

Trade is projected unchanged m/m, at around 43m t, down modestly y/y but well above average, the report said.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He also advises companies on thought leadership imperatives.

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