LONDON, ENGLAND – Although record global grain production is forecast for the current marketing year, which ends June 30, the International Grains Council (IGC) sees carryover stocks falling to a six-year low due to a strong rise in consumption.
In its most recent Grain Market Report, released on June 24, the IGC pegs 2020-21 total grains production at 2.216 billion tonnes, 3 million tonnes lower than the previous month but higher than last year’s record crop of 2.186 million tonnes.
The IGC said a reduced outlook for Brazilian corn is the main reason for the month-on-month decline in projected totals grains output.
Carryover stocks for 2020-21 are projected at 595 million tonnes, a decline of 5 million tonnes from the May forecast and down from 621 million tonnes in 2019-20.
Mostly linked to larger than envisaged imports of corn, barley and sorghum by China, the forecast for global trade in 2020-21 is raised by 5 million tonnes month on month to 425 million.
Based on revised South American estimates, global soybean output in 2020-21 is slightly higher month on month at 363 million tonnes.
“Global soybean output is estimated to have risen by 7% in 2020-21 on sizeable harvests in the US and Brazil,” the IGC said. “Nevertheless, due to smaller carry-ins and record demand, inventories are predicted to tighten, including a heavy contraction in the US. Record trade is anticipated on bigger deliveries to Asia.”
For 2021-22, the IGC projects total global grains production to again set a record at 2.301 billion tonnes, which will lead to a very slight increase in carryover stocks at 597 million tonnes. It said an increase in corn production, mainly in China, will be the catalyst for the increase.
Larger predicted wheat imports in Near East Asia will help to boost the total grains trade projection in 2021-22 by 3 million tonnes to 418 million tonnes.
For soybeans, the 2021-22 production outlook is maintained at a record of 383 million tonnes for an increase of 20 million tonnes year on year. With a higher figure for carry-ins adding to supplies, global soybean stocks are predicted to increase 11% month on month to 53 million tonnes.
The projection for trade is unchanged month on month and is up 1% year on year at a new high.
“The Council tentatively foresees a big world outturn (for soybeans) in 2021-22 as high prices stimulate supply responses in key producers,” the IGC said. “Global uptake is predicted to grow, while a stocks recovery is likely, including modest gains in major exporters.”
Mainly linked to a recent fall in rowcrop prices, the IGC Grains and Oilseeds Index (GOI), which measures average prices, weakened for a second successive month, easing by 3% to 266.
The GOI reached an all-time high in April at 285, which was a 54% increase year to year and its highest level since 2013.