Global wheat production is likely to fall to a five-year low following significant downgrade to crop prospects in the European Union and Russia, the International Grains Council (IGC) said in its latest report.
The inter-governmental body cut its forecast for world wheat production in 2018/19 by 16 million tonnes to 721 million tonnes, the lowest total since the 2013/14 season.
The EU wheat crop was seen at 139.9 million tonnes, down from a previous projection of 147.3 million tonnes, with forecasts for the top four producers in the trading bloc, France, Germany, Britain and Poland, all revised down.
- Unfavourable weather for crops in key growing regions is expected to curtail global total grains production in 2018/19 to a three-year low.
- With tighter supplies and sustained consumption growth, another stocks contraction is envisaged, to the smallest in four seasons.
- The outlook for soyabean trade in 2018/19 is cut to reflect a likely fall in China’s purchases. Nevertheless, global volumes could still expand to a new peak as other buyers secure more.
- World rice stocks are likely to edge lower in 2018/19 on a contraction in reserves in China, but major exporters’ inventories are expected to stabilise after the falls of recent seasons.
Dry and hot weather in northern and central parts of Europe have damaged crops in recent weeks and sent Euronext wheat futures to a three-year high this week.
“Furthermore, with disappointing results being reported from ongoing harvesting, there is potential for further output cuts in future grain market reports,” the IGC said.
Russia’s wheat crop was forecast to fall to 66 million tonnes, down from a previous projection of 70.9 million and far below the prior season’s 84.9 million tonnes.
Global Wheat stocks were forecast to fall to a two-year low of 247 million tonnes with production set to fail to keep pace with consumption in 2018/19 which was seen at 739 million tonnes.
The IGC kept its forecast for world Corn (Maize) production in 2018/19 at 1.052 billion tonnes, slightly above the prior season’s 1.044 billion tonnes, but a second successive global deficit was expected with consumption seen at 1.098 billion tonnes.
“A projected increase in maize largely hinges on a recovery in output in South America where planting for 2018/19 is still some months away,” the IGC said.
World Soybean production in 2018/19 was put at 359 million tonnes, marginally up from a previous projection of 358 million tonnes. A small global surplus was anticipated with consumption projected at 356 million tonnes.