At a record 2,230m t (2,181m year before), the forecast for world total grains (wheat and coarse grains) production in 2020/21 is up by 6m m/m (month-on-month), including upward revisions for wheat, maize, sorghum and rye. Larger feed use figures for maize and sorghum are mainly behind a 4m t upgrade for projected total consumption, to 2,222m (2,181m). The forecast for global grains stocks at the end of 2020/21 is boosted by 5m t m/m (mainly wheat), to 630m, an accumulation of 8m y/y (year-on-year). Adjustments for wheat, maize and sorghum lift the world trade (Jul/Jun) forecast by 4m t m/m, to 395m, an increase of 1% y/y.
Tied to continued heavy shipments from South America, chiefly Brazil, the Council’s forecast for global soyabean trade in 2019/20 is lifted to a peak of 163m t, the 7% y/y gain primarily stemming from bigger dispatches to China. Largely on an upgraded outlook for the US, world production in 2020/21 is projected 8m t higher m/m, at a record of 373m, up by 10% y/y. The m/m increase in total supplies results in an upward revision to consumption, seen climbing to a new high, and stocks. Trade is predicted 3m t higher than before, at a peak of 164m, a marginal y/y advance.
Reflecting a slow pace of shipments, mainly by Thai exporters, the forecast for world rice trade in 2020 is cut by 0.7m t, to a multi-year low of 42m (43m), the third successive y/y decline. Production in 2020/21 is projected to rebound by 2% y/y, to a peak of 505m t, on bigger crops in leading exporters. Carryovers are trimmed from before, to 181m t (177m), albeit still a new high, including gains in key exporters. Trade in 2021 is predicted unchanged m/m, at 45m t, a 6% y/y gain.
The IGC Grains and Oilseeds Index (GOI) increased by 3% m/m, to the highest in nearly two years.
OVERVIEW
The biggest maize harvest in history is largely behind a projected 50m t jump in world total grains (wheat and coarse grains) production in 2020/21, to 2,230m. The world wheat crop is also expected to be a new high, while above-average outturns are predicted for barley, sorghum, oats and rye. Total consumption is seen climbing by 41m t y/y, to 2,222m, led by gains for feed (+18m y/y) and industrial uses (+12m). Amid record supplies, maize demand is seen rising the most, up by 33m t y/y. An 8m t expansion of total grains stocks is foreseen at the end of 2020/21, to 630m t, including accumulations of wheat (+14m) and barley (+3m), but the fourth consecutive contraction of maize inventories (-12m). Trade (Jul/Jun) is seen climbing by 1% y/y, to 395m t, with increased shipments of maize and sorghum, but smaller volumes of wheat and barley.
Tied to significant growth in China’s soyabean arrivals, world import demand in 2019/20 is seen rising by 11m t y/y, to a record of 163m, with most of the increase absorbed by Brazilian exporters. Based on a rebound in US production, together with potentially bigger outturns in the southern hemisphere, global output in 2020/21 is predicted to advance by 10% y/y, to a peak of 373m t. Underpinned by recovering feed sector demand in China, together with expected gains elsewhere amid improving economic conditions, world uptake is projected to rise by 4% y/y. Inventories are also seen expanding, but remaining short of the 2018/19 peak. Growth in global trade could moderate but, at 164m t, would be a new high, with US exports projected to rebound strongly.
Amid weak demand from sub-Saharan Africa, high international prices and a historically slow pace of shipments by Thailand, world rice trade in 2020 is forecast to contract for the third successive season, to a multi-year low of 42m t. Consumption in 2019/20 is anticipated to expand on population growth, and as quarantine and food-security measures underpin uptake in Asia, while inventories may increase on accumulation in India. Reflecting acreage gains in Asia, global output in 2020/21 is predicted to rise by 2% y/y, to a record of 505m t, with consumption and stocks also seen reaching new highs. Trade could expand by 6% y/y in 2021 on firmer demand from importers in Africa, but staying below past peaks.
MARKET SUMMARY
With advances across all sub components, the IGC GOI gained by 3% m/m, to its highest since October 2018.
Increases in US and EU fob values, linked partly to crop concerns and talk of fresh Chinese buying interest, contributed to a 1% m/m rise in the IGC GOI wheat sub-Index.
The IGC GOI maize sub-Index touched a six-month peak, up by 5% from the last GMR. Quotations in South America moved higher on busy exports, while the US market was underpinned by worries about adverse weather.
Amid rain-related harvest delays in Thailand and robust domestic demand in Vietnam, the IGC GOI rice sub-Index gained by 3% m/m.
The IGC GOI soyabeans sub-Index rose by 4% m/m. While values were firmer at all key origins, advances in South America were especially pronounced, partly reflecting currency movements.
