Markets

Consumption rising, stocks trending lower: IGC

Grain Central, November 27, 2020

The Northern Hemisphere corn harvest is all but over for 2020. Photo: Kansas Corn

FOLLOWING a small decline this month, total world wheat and coarse grains production in 2020-21 at 2219 million tonnes (Mt) is now 33Mt above the 2019-20 crop, according to the latest International Grains Council (IGC) monthly report.

Despite production declines seen over recent months, world maize output is still expected to be record 1146Mt, with record crops also anticipated for wheat and barley. The previous record world maize crop, grown in 2016/17, was 1135Mt.

World total grains trade is predicted to expand by 15Mt year on year to a fresh high of 409Mt, including a twelfth consecutive annual increase in maize shipments, record trade in wheat, and a four-season peak for sorghum.

Consumption rising, stocks trending lower

Figure 1. World total grains ending stock and consumption. Consumption (red columns) is trending higher and ending stock (blue columns) lower. Million tonnes. Source: IGC

In its November report, IGC has trimmed its forecast of world total grain 2020-21 ending stock to 616Mt, the fourth consecutive year on year decline.

Ending stocks remain higher than in any of the years prior to the 2016-17 high-production-year spike (Figure 1).

Total grains consumption is predicted to expand by 28Mt year on year to 2221Mt, driven by higher use of maize (+16Mt), wheat (+6Mt) and sorghum (+3Mt).

New peaks for world food and feed use of grains are envisaged, while only a partial recovery from the decline of the previous season is foreseen for industrial use, largely linked to subdued demand for maize processing for ethanol.

Figure 2. Total grains supply/demand estimates at November 2020 in million tonnes. Supply is rising, but not as fast as usage. Trade is reported strong. Source: IGC

Global grains stocks are projected to drawn down for the fourth consecutive year, to a five-season low of 616Mt, down 2Mt from 2019-20, entirely because of a 23Mt reduction for maize. Most of the year-on-year contraction in maize stocks is in China and the US. Stock accumulations are predicted for other grains, including wheat which is expected to increase by 13Mt to a record level, 4Mt for barley and 2Mt for oats.

Price indices mixed

Soybean price sentiment (Figure 3 blue line) was buoyed by solid export interest and underlying worries about South American crop weather.

The IGC GOI soyabeans sub-index surged by 7 per cent this month to its highest since mid-2014

Figure 3. The price sub-index for soyabean (blue line) this month rose, while maize (green line) ended lower. The GOI index overall was 8pc higher this month than last. Index base January 2000 = 100. Source: IGC

While the IGC price sub-index for barley strengthened over the month, the indices for rice and maize firmed slightly also.

The wheat price index was slightly weaker.

 

Source: IGC

 

 

 

 

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