Posted on April, 22, 2024 at 09:04 am
The International Grains Council (IGC) cut its projections of both the 2023/24 and 2024/25 global grain crops and stocks yesterday.
The IGC cut 2023/24 global grain production by 3.5 Mt due to the impact of rising disease and drought stress in parts of the southern hemisphere on maize output. Meanwhile, stronger wheat demand in India is the main factor pushing up the global grain demand estimate.
The changes mean a sharper fall in 2023/24 carry-out stocks than forecast in March, which would reduce the ‘cushion’ to any production issues in 2024/25. In total, global grain stocks at the end of 2023/24 are projected 8.4 Mt lower than the IGC’s March report, with a 3.6 Mt fall for wheat and a 4.8 Mt fall for maize.
There was an even sharper cut to the 2024/25 global grain crop production projection, down 10.1 Mt to 2,322.1 Mt. This is predominantly due to a smaller US maize figure and likely factors in the results of US planting intentions survey, out at the end of March. EU wheat production was also cut by 1.8Mt to 128.7Mt.
Despite the cuts, total global grain production in 2023/24 is still projected 21.3 Mt higher year-on-year and would set a new record. Demand is expected to rise by less than projected in March, mainly due to lower US feed demand.
Despite big changes, the updated projections for 2024/25 continue to show global grain supply and demand finely balanced. This leaves little room for error and will keep grain markets sensitive to changing weather reports in the weeks and months ahead.
In contrast, the global soyabean supply and demand picture for both this (2023/24) and next (2024/25) season continues to look heavy. The IGC increased its 2023/24 end of season stock projection for soyabeans by 0.3 Mt, and 2024/25 projection by 0.5 Mt, largely due to larger Argentinian crop forecasts.
In the absence of any weather event, these heavy stocks are likely to keep pressure on soyabean prices. The extent of the impact on rapeseed prices will depend on prospects for the 2024/25 rapeseed crops; rapeseed has recently expanded its price gap over soyabeans.
The IGC releases its next forecasts on 23 May, with the USDA releasing its first projections for the 2024/25 season on 10 May.
Source: AHDB