At 2,210m t, the forecast for world total grains (wheat and coarse grains) production in 2020/21 is 9m lower m/m (month-on-month), as a large reduction for maize (mainly for the USA, Argentina and Brazil) is only partly offset by increases for wheat (including for Australia, Canada and Russia) and barley (Argentina, Canada). The outlook for grains consumption is lowered by 5m t, to 2,216m, with downgrades for feed and industrial uses of maize outweighing small increases for other coarse grains and wheat. Mainly linked to a downward adjustment for maize, the forecast for all-grain stocks at the end of 2020/21 is down by 5m t, to 611m, representing a 6m y/y (year-on-year) contraction. The figure for trade (Jul/Jun) is trimmed to 408m, as increased projections for shipments of wheat, barley, sorghum and oats do not entirely compensate for a cut for maize.
The first projections for world wheat supply and demand in 2021/22 point to record production and, despite higher consumption, a further accumulation of global stocks. However, the build-up of stocks is again expected to be centred on China and India. An above-average level of trade is predicted, even if not as high as the record of the year before. Russia will potentially export less than in 2020/21, but could remain the largest exporter.
Mostly reflecting downgraded expectations for South American crops, the Council’s outlook for global soyabean production is cut by 6m t, to 359m, still up by 6% y/y. Although the reduction is partly offset by a higher figure for opening stocks – linked to reluctant sales by Argentine growers – consumption is still trimmed by 4m t, to 365m, a 4% y/y gain. While world carryovers are seen little-changed m/m, at 45m t (-6m y/y), the outlook for major exporters’ inventories is cut by 2m, to 10m, the sizeable y/y contraction stemming from a plunge in US stocks. The forecast for trade is maintained at 168m t, a modest y/y fall.
Global rice production in 2020/21 is forecast broadly unchanged from before, at 503m t but, due to a lower figure for opening stocks, total supplies are trimmed by 2m m/m. As consumption is lifted to a new high, world carryovers are lowered to 175m t (+1m y/y), with much of the downward adjustment due to the major exporters, notably India. At 45m t, the projection for trade in 2021 is little-changed and represents a modest recovery y/y.
With all the components higher, but with the strongest gains for maize and soyabeans, the IGC Grains and Oilseeds Index (GOI) rallied by 10% since the November GMR.
World total grains (wheat and coarse grains) production in 2020/21 is forecast to expand by 23m t y/y, to an all-time high of 2,210m, including record harvests of wheat and barley. Although the COVID pandemic continues to dampen demand in some sectors, particularly for fuel ethanol and brewing, overall consumption is predicted to grow for a fifth successive year, to 2,216m t (+24m y/y). This includes gains of 8m t for both maize and wheat, and increases of 2m each for barley, sorghum and oats. Another drawdown of world grains stocks is envisaged, to a five-year low of 611m t (-6m y/y). The decline is entirely because of a drop in maize inventories, to an eight-year low, led by contractions in the US, China and the EU. In contrast, wheat stocks could climb to a new high, although the expansion is mainly in China and India, while the aggregate carryover of wheat in the major exporters is expected to be little-changed y/y. World barley stocks are seen at an 11-season peak, partly because of a sharp rise in Australia following a bumper harvest. Including solid increases for shipments of wheat, maize and sorghum, global grains trade in 2020/21 (Jul/Jun) is expected to reach a record 408m t, up by 4% y/y.
Despite dwindling southern hemisphere prospects, world soyabean output in 2020/21 is still expected to rise by 6% y/y, mainly on a much larger US crop. Underpinned by growth in China’s feed sector, global use is seen expanding by 4%, to a high of 365 m t; increased processing in the major exporters is also likely, underpinned by local and international demand for soyabean products. Global inventories are predicted to contract for a second consecutive year, with major exporters’ stocks plunging to 10m t, the y/y drop of around 60% tied to a heavy reduction in the US. While a modest increase in deliveries to China is likely, tightening availabilities and elevated prices could dampen buying by other importers as trade falls by 1% y/y. US dispatches are seen rising by about one-third y/y, to a new high.
Global rice output is tentatively expected at a new peak on bigger outturns in Asian producers, including India and China. Consumption is also forecast to trend higher on population growth, albeit with uptake in India potentially declining due to the conclusion of COVID-19-related food security schemes. Following a contraction in the prior season, world stocks could edge up, including a modest gain in India. That country is also expected to maintain its position as the dominant exporter, although shipments may retreat from the prior year’s record as Thailand regains some market share. World trade is predicted to expand by 5% y/y on stronger demand from sub-Saharan Africa.
Global export prices saw further strong gains since late November. Led by solid advances in maize and soyabeans, the IGC GOI climbed by 10%, to its highest since July 2013.
The IGC GOI wheat sub-Index posted a 9% gain since the last report, on supportive supply-side fundamentals and spillover from rowcrops.
The IGC GOI maize sub-Index rallied by 13% on deteriorating South American crop outlooks and tightening US availabilities.
Including broad-based gains across the leading suppliers in Asia, the IGC GOI rice sub-Index rose by 6% since late-November.
Amid dwindling US supplies and heightened worries about production prospects in Argentina and Brazil, the IGC GOI soyabeans sub-Index increased by 11%, up by 52% compared to a year earlier.