With outlooks for production and consumption of total grains (wheat and coarse grains) trimmed, the forecast for world stocks at the end of 2019/20 is raised slightly m/m (month-on-month). At an all-time high of 386m t, the forecast for trade (Jul/Jun) is lifted by 6m m/m, including higher numbers for wheat, maize, barley and sorghum. Increases for maize, barley, oats and wheat boost the projection for production in 2020/21 by 7m t m/m, to a record 2,237m, an increase of 62m y/y (year-on-year). The figure for consumption is the same m/m, as a cut for demand in the industrial sector is offset by upward adjustments for food and feed. Higher opening inventories and larger output add 8m t to the projection for world 2020/21 ending stocks, seen building by 20m t y/y, to a three-season high of 635m. Mostly on an upgrade for wheat shipments, grains trade in 2020/21 (Jul/Jun) is placed 3m t higher m/m, at 390m.
The Council’s 2019/20 world soyabean output estimate is pegged marginally higher m/m and, with uptake trimmed slightly, global stocks are raised by 3m t, to 44m, representing a marked tightening y/y. Linked to heavier than expected shipments to China, the trade outlook is upgraded to a peak of 155m t, a 2% y/y gain. A nominal increase for Brazil lifts the projection for 2020/21 global production to 364m t, up by 8% y/y and a record. Mainly reflecting higher opening stocks, carryovers are boosted to 45m t, a modest y/y expansion. Given assumed firm import demand from China, world trade is placed at a peak of 160m t, up 1m m/m.
With few changes to the 2019/20 global rice supply and demand balance sheet from previously, end-season carryovers are maintained at 176m t, a record level on gains in China and leading exporters. The 2020/21 production outlook is trimmed m/m, with the net reduction in total supplies leading to a modestly lower figure for inventories, placed at 180m t, albeit still a new high. The projection for trade in 2021 is unchanged m/m, at 44m t (+4% y/y).
The IGC Grains and Oilseeds Index (GOI) strengthened by 1% m/m, with gains for maize, soyabean and rice export quotations outweighing falls for wheat and barley.
World total grains (wheat and coarse grains) production in 2019/20 is expected to climb by 37m t y/y, to 2,175m, including record harvests of wheat and barley. Expected increases for food and feed are seen outweighing an anticipated drop in industrial demand, to lift total consumption by 15m t y/y, to 2,181m, leading to a 5m y/y drawdown of stocks. Global trade (Jul/Jun) is predicted at a new high of 386m t (+22m y/y), including record shipments of wheat and maize.
At 2,237m t, total grains production in 2020/21 is projected to be up by 62m y/y, led by a jump in maize output (+55m) to a new peak, but with wheat (+6m) also at a record. While consumption prospects are somewhat uncertain, all components of demand are assumed to rise, taking total use to a fresh high of 2,218m t (+37m y/y). As projected supplies are more than ample to meet anticipated demand, the first build-up of global stocks in four years is expected, placed 20m t higher y/y, at 635m; this includes increases for wheat and barley, but a fourth successive depletion of maize inventories, to a seven-year low. Led by the twelfth annual expansion of maize shipments, total grains trade is seen growing by 5m t y/y, to a record 390m.
Although Brazilian output reached a new high, world soyabean production fell by 7% y/y in 2019/20 on a significantly reduced US harvest, with declines, too, in Argentina, Canada, India and Ukraine. And with total use edging up, carryovers are seen contracting sharply on a sizeable reduction in the US. Trade is predicted at a high of 155m t on bigger deliveries to Asia. On the basis of a rebound in US production, world output in 2020/21 could reach a peak of 364m t, an 8% y/y gain. With consumption growth likely to quicken, inventories are predicted to increase only marginally, with exporters’ stocks set to tighten. Traded volumes are projected to expand by 3% y/y.
Despite record production in India, smaller crops elsewhere in Asia and in other regions resulted in a marginal y/y fall in global rice production in 2019/20. Total use is seen at a new high on population growth and efforts to ensure food security in key consumers. Inventories are likely to increase on gains in China and key exporters; linked to accumulation in India, aggregate stocks in the five major exporters are predicted to climb by 10%, to 42.9m t. With elevated international prices and state support seen underpinning expanded acreage, world production in 2020/21 is projected to rise by 2% y/y, to a record of 505m t, while uptake and carryovers may scale fresh peaks. Trade is forecast to recover to 44m t in 2021 on stronger demand from buyers in Africa in particular.
The IGC GOI gained by a net 1% m/m, as firmer rowcrop and rice export prices more than compensated for declines in wheat and barley, which eased partly on seasonal factors.
A 4% m/m drop in the IGC GOI wheat sub-Index was mainly driven by the switch to new crop quotations for some origins. Light pressure stemmed from a broadly comfortable world supply outlook and uncertain demand prospects.
The IGC GOI maize sub-Index rose for a second successive month, up by 3% from late May, mostly on firmer US values, with price support tied to solid buying interest and tight spot Gulf loading capacity.
Underpinned primarily by gains in Thailand, linked to tighter supplies and currency movements, the IGC GOI rice sub-Index firmed slightly m/m.
The IGC GOI soyabeans sub-Index strengthened by 5%, to a five-month peak, boosted by dwindling Brazilian availabilities and a pickup in US export demand, mainly from China.