English | Français | Español | русский
igc logoLog in

Summary

HIGHLIGHTS

At 2,159m t, the forecast for world total grains (wheat and coarse grains) production in 2019/20 is unchanged m/m, as a 3m increase in the figure for barley (mainly for Russia and Syria) is offset by cuts for maize, sorghum, wheat and oats. Because of unfavourable weather, the outlook for grains output in Australia is lowered by 3m t m/m, mostly on downgrades for wheat and sorghum. Following an upward revision of 2m t for wheat, the EU total grains crop is placed at a four-year high. With the forecast for consumption unchanged m/m, the 3m t increase in the projection for world carryover stocks (aggregate of respective local marketing years) to 601m, reflects larger than previously estimated opening inventories, especially in the USA (mainly maize) and Canada (wheat). The 2019/20 (Jul/Jun) trade number is the same m/m, at 370m t, up by 1% y/y (year-on-year).

Figures for soyabean supply and demand in 2018/19 are broadly unchanged m/m, with heavy accumulation in the US set to result in record carryovers, rising by 10m t y/y, to 54m. As marginal downgrades for the US and Argentina are only partly offset by increases elsewhere, the projection for global output in 2019/20 is trimmed by 2m t, to 342m, down by 6% y/y. With consumption lifted slightly m/m, carryovers are lowered by 3m t, to 38m, the y/y contraction of nearly one-third stemming from a plunge in US inventories. At 150m t, world trade is predicted to expand by 1m y/y.

Global rice fundamentals in 2018/19 are little changed from August, with production, consumption and stocks seen at all-time peaks. Due to a marginal m/m reduction, world output in 2019/20 is predicted steady y/y, at a high of 500m t. Population growth will again be the key driver of demand as consumption advances further and, with supplies expected to be boosted by heavy carry-ins, aggregate end-season inventories are likely to rise by 2% y/y, to 178m t. Traded volumes could recover in 2020 on firmer demand from buyers in Africa.

The IGC Grains and Oilseeds Index (GOI) climbed by 1% since the last GMR, as increased export quotations for wheat and maize were only partly offset by decreases for soyabeans and rice.

(see chart)

(see chart)

OVERVIEW

At 2,159m t, world total grains (wheat and coarse grains) production in 2019/20 is forecast to increase by 1% y/y and is set to be the second largest in history. The wheat harvest is expected to be a new peak (+30m t y/y) and the barley outturn is predicted to be an 11-year high (+14m), but the maize crop is forecast to shrink (-31m). The rise in output is entirely offset by tighter opening inventories, keeping global total supply unchanged y/y. All-grains consumption is seen gaining 1% y/y, to 2,186m t, led by growth for wheat and barley feeding. Ample and competitively-priced availabilities of these grains are seen capping demand for alternatives, including maize. A third consecutive contraction of world stocks is envisaged, to 601m t, (down 26m y/y), with another drawdown for the maize carryover (to a six-season low) outweighing build-ups of wheat (to a record) and barley (10-year high). World trade (Jul/Jun) is seen rising by 1% y/y, to 370m t, mainly on bigger shipments of wheat and barley.

(see chart)

In a season of record production, world soyabean carryovers in 2018/19 are seen at a high of 54m t (44m), including a more than doubling of US stocks. Stemming from a plunge in US output, global production in 2019/20 is predicted to contract by 6% y/y, to 342m t. Nevertheless, since fieldwork has only just commenced in South America, with acreage prospects in Argentina especially uncertain, prospects are highly tentative. With modest gains in Asia and key exporters pushing up consumption to a new peak, inventories are anticipated to tighten significantly, with US carryovers potentially dropping by almost 40% y/y. Global import demand is predicted to expand at a below-par rate of 1% y/y.

(see chart)

World rice trade in 2019 is forecast to decline by 4% y/y as a steep fall in deliveries to Far East Asia – including to the key markets of Indonesia and China – is only partly offset by bigger shipments to Africa. Building on the prior season’s gains, projections point to record production, total use and stocks in 2019/20. With accumulation in China and the major exporters likely, aggregate inventories are predicted to rise by 4m t y/y, to a peak of 178m. Global import demand could recover in 2020 on an uptick in deliveries to sub-Saharan Africa. With China again expected to provide export competition in African markets, shipments by India and Thailand are likely to fall short of past highs.

(see chart)

MARKET SUMMARY

Driven by gains in wheat and maize, the IGC GOI consolidated slightly after the heavy losses in the prior two months, rising by 1% m/m.

(see chart)

(see chart)

The IGC GOI wheat sub-Index posted a net-6% gain. Early declines, linked to heavy global supplies were later reversed on a flurry of new export tenders and deepening worries about North American crop prospects.

(see chart)

After dropping to a more than 10-year low early in the month, the IGC GOI maize sub-Index subsequently strengthened, rising by a net 2% m/m, responding to strength in other markets and background risks to the US production outlook.

(see chart)

The IGC GOI rice sub-Index dipped by 2% m/m, with prices generally pressured by soft buying interest ahead of the main harvesting period in a number of key exporters.

(see chart)

With declines in South American export quotations outweighing a modest rise in the US, the IGC GOI soyabean sub-Index posted a 1% net loss.