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Summary

HIGHLIGHTS

At 2,255m t, the Council's forecast for 2022/23 world grains (wheat and coarse grains) production is trimmed slightly m/m (month-on-month), mainly on a smaller wheat estimate. The focus is centred on prospects in the main southern hemisphere exporters, with concerns mounting about winter crops in Argentina. While Australian yields are expected to be strong, heavy rains have heightened the risk of quality losses in eastern areas. Linked to a larger figure for maize feeding, total consumption is placed 1m t higher m/m. Mainly because of changes to wheat, global carryover stocks (aggregate of respective local marketing years) are forecast 4m t lower than before. The figure for trade is lowered m/m due to cuts for maize and barley.

Upgraded outlooks for the US and Brazil lift the IGC's forecast for global soyabean output by 2m t m/m, to a record of 388m, up by 9% y/y (year-on-year), with the net increase in supplies reflected in an uprated outlook for world utilisation. As a consequence, global inventories are maintained at around 54m t, representing a marked y/y gain. The Council's projection for trade is raised by 1m t m/m, to 167m (+8%).

Expectations for global rice supply and demand in 2022/23 are broadly intact compared to October, with production seen falling by 2% y/y. However, world import demand in 2023 (Jan/Dec) is projected 1m t higher m/m, at almost 50m (-5%), in part linked to a higher figure for China. Consistent with an upgraded outlook for trade, predicted shipments by India are lifted slightly.

Boosted by modest gains in average soyabeans, rice and barley export prices, the IGC Grains and Oilseeds Index (GOI) firmed slightly m/m.

(see chart)

(see chart)

OVERVIEW

World total grains output is expected to contract by 33m t in 2022/23, to 2,255m (-1%), with smaller maize (-53m) and sorghum (-1m) crops more that outstripping increases for wheat (+10m), barley (+6m), oats (+2m) and other coarse grains (+3m). At 2,272m t, global consumption is forecast 1% lower y/y, marking the first annual contraction since 2015/16, linked primarily to reduced feed and industrial uptake. A sixth successive y/y drawdown of world grains stocks is predicted, to an eight-year low of 580m t (-16m y/y), almost entirely because of a contraction of maize inventories to their least in a decade. Including smaller imports by China, Canada, Turkey and Brazil, world trade is forecast 4% down y/y.

(see chart)

With an assumed recovery in southern hemisphere yields, led by Brazil, world soyabean production is seen at a peak in 2022/23. With the net increase in supplies set to exceed that of total use – placed at a record on expanded uptake in feed, food and industrial sectors – stocks are predicted to accumulate, including modest gains in exporters. Trade is seen up by 8% y/y on bigger deliveries to Asia and smaller importing regions, with South American exporters set to account for a larger share of trade.

(see chart)

On the basis of solid demand from importers in Africa and Asia, rice trade in 2022 (Jan/Dec) is forecast at a peak of around 52m t (+3%). Concerning prospects for 2022/23, world output is projected to contract by 2% y/y, to 505m t, on smaller harvests in Asian producers. Given a sizeable fall in availabilities, global use is seen dropping by 1% y/y, while reserves are anticipated to contract for the second successive year, to a five-year low; within the total, inventories are predicted to fall in key exporters, notably India. Trade could retreat in 2023 on weaker Asian buying interest.

(see chart)

The Council's latest assessment of global pulses markets foresees the biggest world lentils crop in six years on an improved Canadian harvest. Against the backdrop of bigger availabilities, total use is seen rising solidly, while stocks are set to edge up. Trade is predicted broadly steady y/y, at 4.0m t. Global pulses import demand is pegged at 17.3m t, slightly lower y/y, with China remaining the biggest buyer.

MARKET SUMMARY

After a period of two-sided activity in a number of key markets, the IGC GOI gained slightly since the October GMR.

(see chart)

(see chart)

With mixed trends across the leading origins, the IGC GOI wheat sub-Index dipped by 1%. Market activity was occasionally volatile, with price direction often shaped by developments relating to the Black Sea Grain Initiative.

(see chart)

Linked almost entirely to a pullback in US quotations, the IGC GOI maize sub-Index notched a 3% monthly loss, but remained 12% above year-ago levels.

(see chart)

The IGC GOI rice sub-Index firmed by 2% m/m, underscored by solid demand and supportive currency movements in some markets.

(see chart)

Bolstered by solid export demand and influenced too, by movements in external markets, the IGC GOI soyabeans sub-Index rose by a net 1% over the past month.