Markets

Global wheat current crop tipped record: IGC

Grain Central, February 28, 2020

WHEAT and barley harvests worldwide achieved records in 2019/20, according to the International Grains Council market report released overnight.

The record wheat and barley more than compensated for a smaller maize crop to make world total grains (wheat and coarse grains) production in 2019/20 the second biggest ever, to 2172 million tons (Mt). The biggest was 2190Mt in 2016/17.

Table 1. Supply demand summary, (a) wheat and coarse grains. Source: IGC

The trend of growth of consumption (Table 1) combined with a smaller maize crop in 2017 and wheat crop in 2018 would further trim total grains 2019/20 ending stocks to 604Mt.

Trade (Jul/Jun) is expected to expand by 4pc, including larger shipments of wheat, maize and barley.

Most of the stock decline is attributable to maize.

Consumption trend

Global grain use no doubt is increasing. The past decade wheat and coarse grains usage has risen about 20pc; it was 1798Mt in 2010/11 and forecast to be 2193Mt in 2019/20.

Changes February compared with January

Crops in the 2019/20 production cycle are virtually all harvested now, so the 2019/20 forecast data won’t change much.  The report lifted production, trade and stock for total grains, both wheat and maize by small quantities, less than 1pc, this month.  It trimmed July/June consumption of wheat and maize each by 1Mt compared with the January estimate, the wheat figure attributable to a reduction in wheat feeding.

Trade (Jul/Jun) was lifted by 2Mt, to 379Mt, mostly reflecting increased wheat shipments.

Total grains stocks, 604Mt, was lifted 4Mt this month, 3pc below the 625Mt stock estimated last year.

Price indices fall

IGC’s grains and oilseeds overall price index (GOI) fell three per cent this month.

Soybeans, wheat and maize index each was down 3pc, 4pc and 5pc.

Rice was up 1pc.

Covid-19 is the fear factor, but favourable production in the current crop, mostly non-threatening new year outlooks for crops and growing expectations for comfortable supplies in the season ahead are significant underlying influences on the global supply/demand.

2020/21 outlook record

IGC’s preliminary forecast of world wheat production in 2020/21 is a record 769Mt, much of this month’s increase reflecting higher wheat production in India.

A further build-up of stocks would see inventory growth again concentrated in China and India.

World wheat harvested area is seen to rise 2pc, but global barley area could be down 1pc owing to potentially weaker returns.

World maize harvested area in 2020/21 is tentatively seen growing by 1pc, mainly on a rebound in the US.

Source: IGC

 

 

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