Markets

Record grain consumption drives stocks down : USDA

Henry Wells, May 11, 2018

WORLD wheat production for 2018/19 is set to fall below consumption levels for the first time in years for wheat, and for the second consecutive year for coarse grains, according to the latest United States Department of Agriculture (USDA) report released overnight.

Agricultural supply and demand estimates appear to confirm the likelihood that world coarse grains’ stock will fall another 38 million tonnes (Mt) by the end of the 2018/19 crop year. Coarse grains include corn, barley, sorghum, oats and rye.

The USDA forecasts 2018/19 coarse grain production to be 1341 million tonnes (Mt), up 24Mt compared with previous year; consumption 1378Mt up 23Mt; trade superscript 1 191Mt, up 6Mt; and ending stock 185Mt, down 38Mt.

Superscript 1 trade is a standardised year, which for coarse grains is October/September. It is reported differently from the crop year production, consumption and stock figures, resulting in a number that typically will not add.

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Table 1: Following a number of years of excess production over consumption, wheat production/consumption is forecast to turn slightly this year, while coarse grains will consolidate their second year of production deficit. (Source: USDA)

  (Mt) 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Wheat production 715 728 736 750 758 748
Wheat consumption 697 704 711 739 744 754
Coarse grains production 1,283 1,312 1,262 1,369 1,317 1,341
Coarse grains consumption 1,237 1,277 1,258 1,356 1,355 1,378

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Barley wrap

The USDA forecasts world barley production will be up 5Mt in 2018/19 to 148Mt.

Australia, EU and Turkey will produce bigger barley crops while Russia and Ukraine will produce smaller crops.

Barley trade in 2018/19 forecast higher, driven by steady growth in the Middle East and rising demand in China.

China is expected to remain the world’s top importer, its barley demand further strengthened by the cut to imported US-origin sorghum.

World barley stock is set to fall to 17Mt, the lowest stock since 1983/84.

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Table 2: World barley stock, million tonnes. (Source: USDA)

 (Mt) 2014 2015 2016 2017 2018 2019
Barley 25 24 26 22 18 17

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US sorghum finds new homes

World sorghum production was forecast by USDA up 1Mt to 58Mt in 2018/19 and consumption also up 1Mt to 59Mt.  Ending stock and world trade wer both forecast down 1Mt to 4Mt and 6Mt respectively.

USDA said it saw Japan sorghum consumption forecast to rise by 800,000t to 1.4Mt as it expected Japan’s feed rations to adjust as US sorghum prices itself again competitively for Japan.

 

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