Markets

World wheat production, consumption highs: IGC

Grain Central, October 25, 2019

DESPITE a worsening outlook in the southern hemisphere due to sustained dryness, including drought in Australia, 2019/20 world wheat production is still expected to be higher this year than last, according to the monthly report of the International Grains Council (IGC) released overnight.

World total wheat production in 2019/20 is forecast at 762.3 million tonnes (Mt) this month, compared with 763.5Mt last month, 733Mt last year and 761.8Mt in 2017/18.

Production in India and China are higher than last year, and the current-year estimates are the same or higher than last year in all major exporters except Kazakhstan and Australia.

But from last month to this, current-year forecasts have turned around dramatically, owing to extremely dry conditions continuing in the southern hemisphere.

The turnaround has seen IGC reduce its forecast of wheat supply in Argentina by 900,000t, and exports by 700,000t.

Australia’s supply was reduced by 2.1Mt and exports by 1.3Mt.

It increased exports forecasts by 500,000t each for Kazakhstan, Russia, the United States, and Ukraine,  by 1Mt for the European Union.

The net effect of these increases is that world total exports are  forecast at 173.1Mt, 1.2Mt higher than IGC’s September forecas.

Total world consumption is forecast at 1.4Mt less than the September figure, but at 756.1Mt, is still around 20Mt higher than the three recent years’ usage records.

(Click on image to expand).

Australia tracking decade lows

Australia’s harvested wheat area and production have suffered graphically since the exceptional season of 2016/17.

The current malaise is a consequence of severe and ongoing dry conditions in Queensland and northern New South Wales.

Price indices firmer

The wheat price sub-index as recorded by IGC has risen 4 per cent this month, underpinned by solid export demand and deteriorating crop prospects in some major producers, particularly late-season supply concerns in Kazakh, Argentine and Australian crops.

The previous strong and sustained rise was in 2017/18; the index spent much of the past year falling.

Soybean and maize-price indices were up 6pc and 4pc respectively, and the rice price index was steady.

Source: IGC

 

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