World total grains (wheat and coarse grains) production is expected to decline by 1% in 2018/19, to a three-year low of 2,081m t, the International Grains Council (IGC) said in its latest monthly report, adding that a better maize harvest (+26m t y/y) is seen being outweighed by falls for other crops, especially wheat (-38m) and barley (-6m).
Despite this month’s relatively large China-related adjustments, the outlook for global grains supply and demand in 2018/19 is similar to the last report. Overall availabilities are seen contracting by about 1% y/y, while demand growth is expected to be sustained, including for food, feed and industrial uses, the IGC said.
“World carryover stocks are expected to shrink to a four-season low, with the ratio of stocks-to-use the tightest since 2013/14. The biggest projected fall in inventories is for maize (-38m t) and includes reductions for both the major exporters (-9m) and China (-24m),” the report said.
In contrast, the drop for wheat (-11m t) is concentrated in the major exporters, while a further build-up is envisaged for China, it added.
The IGC predicted a sixth consecutive rise in total grains trade, to a record, led by a 10th year of expansion for maize. Wheat shipments are expected to stay at a high level, albeit a little lower y/y, while those of barley could be at a new peak. With buying by China potentially halving y/y, the volume of sorghum trade could be the least in seven years, it said.
“The Council forecasts an expansion in world wheat area for the 2019/20 harvest, the first gain in four years, but more rain is needed for planting and crop establishment in some major producing areas, especially in parts of the EU, Russia and Ukraine. Given current conditions, sizeable declines in rapeseed area are likely in the EU,” the report added.
Linked to area gains and improved productivity in leading producers, global soyabean output in 2018/19 is seen advancing to a high of 369m t, a 29m y/y increase, according to the IGC.
“Although the Brazilian planting campaign is progressing swiftly, the southern hemisphere outlook remains tentative at this stage. World use should continue to trend up on demand from global feed, food and industrial sectors, while inventory accumulation in major exporters, chiefly in the US, is anticipated to underpin a near-30% rise in end-season carryovers. China’s imports are expected to fall for the second successive year. However, with bigger shipments to smaller markets in Asia, as well as to the EU and Africa, trade is forecast at a high of 155m t, up by 1% y/y. Although Brazil’s exports may retreat slightly, volumes would still be more than 15m t above average,” it said.
The IGC said that firm demand from Asian importers is expected to underpin a 1% y/y increase in global rice trade in 2018.
“This comes despite weaker buying interest from China, as well as potentially reduced dispatches to Africa. The 2018/19 production outlook is tentative, but appears positive, with gains in key exporters – including India, Thailand and the US – compensating for a drop in China. With food use set to reach a fresh peak, world stocks may contract, including a small decline in China amid official efforts to counter a build-up of supplies. Trade is predicted at a peak in 2019 on bigger deliveries to Near East Asia and Africa,” it pointed out.