Summary
HIGHLIGHTS
Entirely because of a downgraded outlook for maize, tied mainly to rising disease and drought stress in parts of the southern hemisphere, the forecast for 2023/24 total grains (wheat and coarse grains) production is cut by 3m t m/m (month-on-month), to 2,301m. Consumption is raised by 3m t m/m, mostly on an upward adjustment for wheat. With smaller supply and increased uptake, the projection for closing stocks (aggregate of respective local marketing years) is lowered by 8m t, to 591m. The outlook for trade is lifted again, now seen at a three-year peak.
The 2024/25 grains supply outlook is slightly tighter compared to last month's initial projections. In addition to a smaller carry-in, the production forecast is cut by 10m t, to 2,322m, predominantly due to a smaller US maize figure, but with total output still seen at a new peak. Despite a scaled-back outlook for consumption, mainly for US feed/residual use, end-season carryovers are placed 9m t down m/m, at 592m, seen fractionally higher y/y (year-on-year).
With customs data pointing to bigger than anticipated dispatches to key markets more recently, the outlook for world soyabean trade in 2023/24 is uprated slightly, to around 167m t, albeit still representing a 3% y/y decline. Tentative projections for supply and demand in 2024/25 are broadly intact, including record production, consumption, stocks and trade.
There are only marginal adjustments to the rice supply and demand balance sheet for 2023/24, with global end-season reserves seen 1m t higher m/m, at 167m (-4m). Trade is forecast unchanged from before, at 50m t, modestly lower y/y. A reduced figure for China trims the 2024/25 global production forecast by 1m t m/m, to 520m (512m), but, with consumption cut, inventories are uprated slightly. The Council’s expectations for trade in 2025 (Jan/Dec) are maintained at about 50m t, steady y/y.
The IGC Grains and Oilseeds Index (GOI) was slightly weaker in the five weeks since the March GMR, weighed by net declines in soyabeans, rice and wheat.
At 2,301m t, world 2023/24 total grains output will be the largest on record, 2% higher y/y, with a much bigger maize outturn more than offsetting declines in wheat, barley and oats. Consumption is also seen at a fresh peak, including y/y gains in feed, food and industrial uses. Total stocks will contract again, placed at a nine-year low, albeit with some expansion in the major exporters.
Production is projected to rise by 1% in 2024/25, to 2,322m t, including predicted larger wheat (+8m) and coarse grain (+13m) harvests. Constrained by comparatively tight opening stocks, overall availabilities are forecast only slightly higher y/y. Factoring in relatively modest overall consumption gains, year-end carryovers are expected to expand slightly, to 592m t. World trade is seen falling by 2% y/y, mainly tied to projections for reduced wheat and maize flows.
Owing to a heavy crop in Argentina more than offsetting smaller harvests in the US and Brazil, global soyabean output is seen at a record in 2023/24, with consumption and stocks also set to expand solidly. However, reflecting reduced shipments to markets in Asia and the Americas, traded volumes are predicted to contract by 3% y/y. Amid provisional outlooks for sizeable crops in the three majors, global production is pegged at an all-time peak of 413m t (+6%) in 2024/25, while rising demand for soya products from feed, food and biofuels sectors is seen boosting processing to a new high. Trade is tentatively projected to rebound, by 3% y/y.
Stemming from a contraction in key exporters, world rice output is seen marginally down y/y in 2023/24, with declines in total use and reserves also anticipated. Chiefly tied to prospects for gains in the five majors, world rice production is predicted to resume an uptrend in 2024/25, to a record of 520m t (+2%), with consumption and stocks also set to grow. However, since Indian restrictions are assumed to remain in place, there appears limited potential for an expansion of trade in 2025 (Jan/Dec), pegged at about 50m t, unchanged y/y.
Owing to a smaller Indian harvest, global chickpeas output is seen down by 1.0m t y/y in 2023/24. Together with gains in local use, inventories are likely to fall sharply. Looking to 2024/25, the Council’s first formal outlook places world production steady y/y, at 16.8m t. With supplies set to tighten, uptake and inventories are expected to drop. Trade in 2025 (Jan/Dec) is projected at 2.4m t, little-changed y/y.
MARKET SUMMARY
The IGC GOI dipped by 1% since mid-March. Amid overall few fresh developments, trading in grains and oilseed markets was generally two-sided, but with rice values trending almost consistently lower across the period.
Pulled lower by declines in North America and Australia, the IGC GOI wheat sub-Index dipped by a net 1%. The downside was contained by gains elsewhere, including in Russia and Argentina.
The IGC GOI maize sub-Index firmed by 2% m/m, but with divergent trends across the main origins. While solid gains were noted in Brazil, spot quotations there were seasonally nominal.
The IGC GOI rice-sub Index retreated by 3%, weighed by seasonal harvest pressure and overall subdued buying interest.
Amid an increasingly bearish fundamental backdrop, the IGC GOI soyabeans sub-Index declined by 2% overall, led by a downturn in US fob (Gulf) prices.