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Summary

HIGHLIGHTS

The outlook for world total grains (wheat and coarse grains) production in 2022/23 is increased by 1m t from the November GMR, with output seen 1% lower y/y (year on year), at 2,256m. Given smaller opening inventories and higher use, the forecast for global carryover stocks (aggregate of respective local marketing years) is reduced by 3m t, to 577m, an eight-year low.

With little assumed change in 2023/24 wheat acreage, a pullback in yields could limit production to 788m t, down by 1% y/y. Food demand will likely return to trend growth but, with feeding seen lower, total use is projected to expand by a slower than average 1%. World stocks are forecast to tighten, pulled lower by a smaller carryout in the major exporters.

With a downgraded crop figure for Argentina outweighing marginal increases elsewhere, world soyabean output is predicted 3m t down from previously, at a peak of 385m (+8%). With the reduction in supplies broadly matched by a lower consumption number, aggregate end-season inventories are unchanged compared to November. Trade is seen fractionally up from before, at 168m t (+8%).

There are few changes to the Council’s outlook for world rice supply and demand in 2022/23, with a smaller outturn feeding through to a drop in local use and a reduction in stocks. However, uprated expectations for key importers, including China and Indonesia, lift the projection for trade in 2023 (Jan/Dec) by more than 1m t, to 51m (-5%). On the exporter side, outlooks for shipments by India and Thailand are pegged higher than before.

With mixed trends across the major components, the IGC Grains and Oilseeds Index (GOI) dipped by 1% since the last report.

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OVERVIEW

Aggregate grains production totalled 2,256m t in 2022/23, down by 33m compared to the prior season's peak. The contraction mainly reflects a smaller maize crop, seen 58m t lower y/y, with much-reduced harvests in the US, Ukraine and the EU. In contrast, the wheat outturn was a new record, while there was a recovery too, in barley and oats output. Despite an unusual pullback in consumption, pegged 1% lower y/y, at 2,275m t, a comparatively steeper drop in supply will result in a further tightening in global stocks. End-season inventories are seen contracting by 19m t, to 577m, and the ratio of stocks-to use of 25.3% placed at its tightest since 2012/13. Including smaller maize, wheat, barley and sorghum shipments, grains trade is predicted to recede by 17m t, to 407m.

(see chart)

Despite the backdrop of worrisome conditions in some growing areas of South America, 2022/23 global soyabean production is seen advancing by almost 30m t y/y to a new high, mainly on a sizeable Brazilian harvest, with modest increases elsewhere, too. Record utilisation is anticipated, while inventories are likely to recover, albeit with major exporters’ reserves remaining historically tight. Trade is anticipated to rise by 8% y/y on stronger buying interest for assumed competitively priced southern hemisphere availabilities.

(see chart)

Reflecting reduced harvests in key producers, the 2022/23 world rice outturn is seen falling by 12m t y/y. Against the backdrop of thinner supplies, food uptake is set to decline, while a marked tightening of stocks is predicted, including in China and key exporters. Although trade is projected to contract, volumes in 2023 are still set to exceed 50m t, with Indian exports well above the recent average.

(see chart)

World dry peas production in 2022/23 is projected to expand by 11% y/y, to 13.6m t, principally tied to gains in Canada and Russia, also feeding through to expanded use and a rebound in stocks. Trade is seen increasing solidly, with Canadian exports potentially up by about one-quarter y/y. Total world trade in all varieties of pulses in 2023 (Jan/Dec) is predicted at 17.7m t (+3%).

(see chart)

MARKET SUMMARY

With losses in wheat, barley and maize export prices partially offset by net gains in rice and soyabeans, the IGC GOI dipped by 1% in the period since the last report.

(see chart)

(see chart)

Amid some improvements to the global supply outlook and, with Black Sea exporters providing stiff competition on the world market, the IGC GOI wheat sub-Index tumbled by 8%, touching a 15-month low.

(see chart)

Linked entirely to weakness in the US, where prices retreated on broad concerns about sluggish export demand, the IGC GOI maize sub-Index eased by 1% from mid-November.

(see chart)

The IGC GOI rice sub-Index gained by 8% over the past two months, bolstered by an uptick in international demand, currency movements and concerns about supplies in South Asia.

(see chart)

The IGC GOI soyabeans sub-Index was a touch firmer in the period since the November GMR, albeit with mixed price movements across key origins.