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Summary

HIGHLIGHTS

The forecast for world total grains (wheat and coarse grains) production in 2019/20 is raised by 5m t m/m (month-on-month) to 2,162m, mainly because of an upgrade for maize. Reflecting better than expected yields, but slightly smaller than predicted harvested area, the outlook for the US maize crop is lifted by 3m t, to 345m (366m last year). With figures boosted from before for the EU and Ukraine, the global barley outturn is now estimated to be a record. At 2,188m t, up 1% y/y (year-on-year), the projection for total grains consumption is 4m higher m/m, with most of the adjustment for maize. Changes to maize and barley add around 2m t to the grains carryover projection, but world stocks are still seen shrinking for the third consecutive year. The figure for trade is 0.8m t higher m/m due to increases for maize and sorghum.

World wheat area for the 2020/21 harvest is predicted to expand by 1% y/y, to 218m ha. Wet weather interrupted autumn fieldwork in parts of the EU, most notably in the UK and France. Dryness has left recently sown crops in Ukraine poorly established ahead of the winter, with a significant drop in area reported. In contrast, the area for harvest in Russia is projected to expand. Seeding in the US was virtually complete, with planted area expected to remain close to historic lows. The world rapeseed area is tentatively seen up by nearly 3% y/y, including gains in the EU and the Black Sea region.

The Council’s outlook for world soyabean output in 2019/20 is maintained at a peak of 341m t, the 5% y/y contraction reflecting a plunge in US output. Consumption is seen broadly unchanged from before but, due to a higher figure for opening stocks, carryovers are lifted by 3m t, to 35m. This is still almost one-third lower y/y, mostly tied to a steep drawdown in the US. With a modest upgrade for forecast deliveries to China offset by reductions for others, the trade projection is kept at 151m t, steady y/y.

Largely reflecting the continued slow pace of dispatches by India and Thailand, the outlook for world rice trade in 2019 is cut by 1.0m t m/m, to 43.5m, a 6% y/y drop. Global production in 2019/20 is forecast at 500m t, little-changed y/y. And with consumption fractionally higher than in October, world inventories are raised by 1m t m/m, to a record of 180m, a 6m y/y gain. The projection for trade in 2020 is cut slightly but, at 45.4m t, would represent a moderate recovery.

The IGC Grains and Oilseeds Index (GOI) weakened by 1% since the last GMR, including falls for wheat, soyabeans and rice, but an increase for maize.

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OVERVIEW

At 2,162m t, world total grains (wheat and coarse grains) production in 2019/20 is forecast to rise by 1% y/y, as bigger crops of wheat and barley (a record) outweigh a decline for maize. The increased global harvest is expected to nearly compensate for the smallest opening stocks in three seasons, to leave overall supply only a fraction lower y/y. Total grains consumption is predicted to climb to a new high of 2,188m t (+1% y/y), including gains for food, feed and industrial uses. Global stocks of grains are projected to contract by 26m t, to a five-year low of 594m. The fall is entirely linked to a drop in maize inventories (-39m t y/y), including reductions in the USA (-7m), China (-21m) and the EU (-2m). Carryover stocks of wheat could be the largest in history, but the accumulation is mostly in China and India, while aggregate inventories in the major exporters could be little-changed y/y. Trade (Jul/Jun) in grains is expected to reach a new all-time high of 375m t (+3% y/y), including greater shipments of wheat, maize, barley sorghum and oats.

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As the smallest US harvest in six seasons is only marginally offset by potentially larger outturns elsewhere, including in Brazil, global soyabean production in 2019/20 is tentatively seen contracting by 5% y/y, to 341m t. Modest gains in feed, food and industrial demand in Asia and the Americas in particular are anticipated to push up consumption to a high but, at 2%, y/y growth would pale in comparison to earlier periods. Mostly due to a drawdown in US stocks, carryovers are predicted to contract by one-third y/y, to 35m t. With bigger deliveries to China and a host of other markets offsetting smaller shipments to South America, trade is seen little-changed y/y, at 151m t.

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With weak demand from several key Asian buyers only partly offset by a slight firming of buying interest from importers in sub-Saharan Africa, global rice trade in 2019 (Jan/Dec) is seen falling by 6% y/y, to 43.5m t. As a consequence, sales by India and Thailand are expected to contract. In contrast, China’s exports are set to post strong y/y growth on bigger deliveries to Africa. Global production is predicted broadly steady y/y in 2019/20 as smaller crops in India and China are offset by gains elsewhere, while accumulation in leading producers could push up inventories to a new peak. Trade is projected to rebound, but stay below past highs.

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MARKET SUMMARY

The IGC GOI edged lower in November, as firmer maize export quotations were countered by weakness in wheat, soyabean and rice prices.

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With global prices anchored by ample availabilities, the IGC GOI wheat sub-Index dropped by 3% compared to the October GMR.

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Net gains in South American quotations, linked to continued strong export demand, more than compensated for a fall in US prices, lifting the IGC GOI maize sub-Index by 2% m/m.

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The IGC GOI rice sub-Index dipped by 1%. Market activity was generally quiet, as buyers awaited the arrival of new crop supplies from India and Thailand.

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Including modest declines at all major origins, the IGC GOI soyabeans sub-Index retreated by 2% during November.