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Summary

HIGHLIGHTS

Mainly because of increases for maize in Argentina and Brazil, the forecast for total grains (wheat and coarse grains) production in 2018/19 is 3m t higher m/m (month-on-month), at 2,128m. Consumption is lowered by 5m t m/m with most of the adjustment for feed and industrial use of maize in the USA. With bigger supply and smaller usage, the outlook for grain stocks is lifted by 8m t, to 611m, a drop of 36m y/y (year-on-year). Trade is placed a little higher m/m, as upward revisions for wheat and maize outweigh cuts for barley and sorghum.

For 2019/20, the projection for grains production is boosted by 2m t, to 2,178m, including uprated figures for wheat and maize. Larger opening inventories, higher output and lower consumption boost the forecast for world ending stocks by 13m t, to 588m, with those in the major exporters now placed slightly higher y/y.

Tied to improved prospects in South America, the outlook for soyabean output in 2018/19 is raised by 3m t m/m, to a record of 362m, a 6% y/y rise. With use unchanged from before, the net increase in supplies is channelled to inventories, seen up by 10m t y/y. The outlook for production in 2019/20 is lifted by 2m t m/m, to 361m. Together with a larger figure for opening stocks, aggregate carryovers are pegged 5m t higher than in March. The projection of trade is trimmed to 153m t and would be little-changed y/y.

Reflecting a reduced consumption figure, the forecast for world rice stocks in 2018/19 is 1m t higher m/m, at 158m, up 8m y/y, including a modest increase for the major exporters. The 2019 trade outlook is cut but, at 47m t, remains historically high. The Council’s projections for 2019/20 are mostly maintained from March, with an anticipated solid increase in availabilities absorbed by gains in uptake and inventories, the latter rising by 5m t y/y. Trade in 2020 is predicted steady m/m, at 48m t.

The IGC Grains and Oilseeds Index (GOI) declined by 5% m/m, with the biggest falls for wheat and maize.

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OVERVIEW

World total grains (wheat and coarse grains) production in 2018/19 fell by 13m t y/y, to 2,128m, while consumption is expected to climb by a similar amount, to 2,165m. Total grains stocks (aggregate of respective local marketing years) are forecast to contract by 36m t, to 611m, including falls for maize (-26m), wheat (-6m) and barley (-2m). Grains trade is expected to match the season before, as the tenth consecutive rise for maize compensates for smaller shipments of wheat, barley and sorghum.

World total grains production in 2019/20 is projected to climb by 2%, to 2,178m t, including bigger harvests of wheat (+26m), maize (+6m) and barley (+8m). Despite increased output, overall availabilities will edge only slightly higher owing to the smallest opening stocks in three seasons. Increases for food, feed and industrial uses are envisaged to propel total consumption to a new high of 2,201m t (+2% y/y). Amid record demand and only a minor supply expansion, a third successive depletion of global stocks is predicted, to a five-year low of 588m t (-23m y/y). Little change in trade is projected as larger wheat shipments are balanced by a fall for maize.

(see chart)

Stemming from a rebound in Argentina, but with other producers threshing bigger crops, 2018/19 world soyabean output is forecast at a record of 362m t, a 6% y/y gain. With modest consumption growth anticipated, aggregate stocks are seen at a peak of 55m t, on heavy accumulation in the major exporters. While shipments to China are anticipated to fall, other buyers should secure more, leaving global trade only a fraction lower y/y, at 152m t. The US harvest in 2019/20 may be slightly smaller than in the prior season but, with potential increases elsewhere, world production is predicted to be little-changed y/y, at 361m t. Amid expectations for gains in feed uptake, total use is seen rising further, although the outlook is highly tentative given policy and demand-side uncertainties in China. Trade is placed at 153m t, marginally higher y/y.

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Global rice production in 2018/19 is forecast to be up by 1% y/y, at a record of 500m t, including bigger harvests in key exporters and sub-Saharan Africa. Consumption could reach a new high amid ample availabilities and rising populations, while aggregate stocks may expand on gains in India and China. World output in 2019/20 is tentatively seen at a peak of 505m t as acreage expansion in some Asian producers more than offsets falls in China and the Americas. Amid plentiful supplies, growth in total use and inventories is expected, with trade in 2020 potentially up on demand from buyers in Africa.

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MARKET SUMMARY

Pressured by mostly favourable outlooks for northern hemisphere winter grains and rowcrops in South America, the IGC GOI slumped by 5% m/m, to a more than three-year low.

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Owing to ample spot availabilities and broadly favourable new crop prospects, the IGC GOI wheat sub-Index fell by 6% m/m.

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The IGC GOI maize sub-Index tumbled by 6%, to a six-month low, on comfortable US supplies and expectations for large South American surpluses.

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With global markets largely stable m/m, the IGC GOI rice sub-Index is unchanged compared to the last GMR.

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The IGC GOI soyabean sub-Index declined by 4% from late-March, to its lowest since December 2008, on seasonal harvest pressure and underlying demand constraints.