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Summary

HIGHLIGHTS

The forecast for global total grains (wheat and coarse grains) production in 2022/23 is trimmed by 3m t m/m (month-on-month), to 2,252m, mainly to reflect drought stress in the EU, including for wheat, barley and maize. Largely because of a revised feed use figure, the outlook for world consumption is also down by 3m t, leaving the projection for closing stocks (aggregate of respective local marketing years) unchanged from before. Due to an increased forecast for EU maize imports, the figure for trade (Jul/Jun) is 1m t higher m/m, at 406m.

Forecasts for soyabean supply and demand in 2021/22 are largely unchanged m/m. Chiefly reflecting downgraded US prospects, global output in 2022/23 is predicted 4m t lower m/m, at 386m, up by 10% y/y (year-on-year). With total use broadly unaltered m/m, carryovers are trimmed, albeit still much higher y/y. With expectations for China’s imports scaled back, trade is forecast 1m t lower, at 165m (+11m).

With the outlook for rice use in 2021/22 uprated slightly on an increased figure for Indian demand, inventories are trimmed by 1m t, to 180m (-2m y/y). Global output in 2022/23 is projected broadly steady m/m but, with consumption revised higher, carryovers are seen tighter than in June, at 179m t (-1m). The forecast for trade in 2023 is raised slightly, to a record of 52m t.

With all sub-components dropping m/m, the IGC Grains and Oilseeds Index (GOI) slumped by 10%, to levels not seen since before the escalation of the Black Sea conflict.

(see chart)

(see chart)

OVERVIEW

Mainly due to projected declines in maize (-32m t y/y) and wheat (-11m), 2022/23 total grains production is forecast to fall by 2%, to 2,252m, potentially the first contraction in five seasons. Amid tighter supplies and anticipated elevated prices, total consumption could dip slightly on lower feed use, but with food and industrial uptake seen edging higher. After a small gain in the season before, carryover stocks are projected to tighten again, placed at an eight-year low of 583m t (-4%). Including y/y reductions for all major grains (except for oats), world trade is projected to recede by 4%, to 406m t.

(see chart)

With a plunge in South American production only partly offset by gains elsewhere, global soyabean output fell sharply in 2021/22, by 18m t y/y, with consumption and import demand also set to retreat. Linked to a sharp fall in exporters’ reserves, global inventories were significantly tighter. Tentatively assuming larger southern hemisphere harvests, 2022/23 world output is predicted at a record of 386m t (+10% y/y). A recovery in both uptake and trade is anticipated, led by gains in Asia, while carryovers could accumulate, including in key suppliers.

(see chart)

With sizeable harvests in Asian producers, world rice output reached a record in 2021/22, with total use advancing on expanded food uptake and trade remaining elevated on African demand. Further gains in production and uptake are anticipated in 2022/23, while inventories are expected to stay close to recent highs. Leaving aside a nominal figure for China, major exporters’ reserves are predicted at a new peak on accumulation in India. Trade is seen edging up to a high of 52m t.

(see chart)

With respect to pulses, 2022/23 world chickpeas use is seen increasing by 8% y/y, to new high, as a bigger global crop boosts availabilities, especially in India. Inventories are predicted to rise further, while trade is seen little-changed y/y. Total pulses trade in 2022 (Jan/Dec) is projected to edge lower, to 17.0m t (-2% y/y).

MARKET SUMMARY

Led by declines in maize and wheat, the IGC GOI dropped by 10% compared to the June GMR, to its lowest in more than five months.

(see chart)

(see chart)

The IGC GOI wheat sub-Index fell by a net 12%. While trading was occasionally volatile, losses stemmed from a seasonal increase in northern hemisphere supplies, spillover from external markets and speculation about the possible opening of Black Sea export corridors.

(see chart)

Weighed by seasonal weakness in South America and broader-based economic concerns, the IGC GOI maize sub-Index slumped by 13% m/m.

(see chart)

Amid generally weak demand and harvest pressure, the IGC GOI rice sub-Index declined by 1% m/m.

(see chart)

The IGC GOI soyabeans sub-Index was 9% lower overall, pressured mainly by losses in energy markets, slower overseas buying interest and growing recessionary threats.