“With upward revisions for the United States, Russia, Ukraine and Australia more than offsetting smaller figures for the European Union and Algeria, the forecast for global production in 2016-17 is up by 7 million tonnes (from the previous forecast) to 735 million tonnes,” the IGC said.
The IGC forecast 2016-17 world wheat ending stocks at a record 228 million tonnes, up 2 million tonnes from the previous projection issued in early July and up 9 million tonnes from 219 million tonnes in 2015-16, the current record.
The IGC also raised its projection for total grains production to 2.046 billion tonnes, up from 2.026 billion a month ago. Total consumption was raised to 2.029 billion tonnes from 2.010 billion.
Minor upgrades for the United States and Canada led the IGC to project a slight uptick in 2016-17 world soybean production, to 321 million tonnes from 320 million. The consumption projection, meanwhile, was raised to 327 million tonnes from 324 million. The IGC said global trade is expected to expand by 3%, to a record 135 million tonnes, driven by larger shipments to China.
The 2016-17 world outturn for rice is expected to total 487 million tonnes, up from 486 million a month ago. The IGC cited gains in Asian producers, including China, India and Thailand.
“However, given reduced carry-in stocks, total supplies are expected to increase only modestly, and with consumption set to expand further, end-season inventories are seen contracting slightly,” the IGC said.
World grains and oilseeds export prices mostly weakened during July, leading to a nearly 6% decline in the IGC Grains and Oilseeds Index (GOI).
“While conditions were not ideal everywhere, including in some key wheat producers, the overall supply outlook was deemed comfortable,” the IGC said. “Amid stiff competition for business, a number of exporters lowered offers in an attempt to stimulate demand.
“Daily activity was heavily influenced by weather forecasts, particularly those affecting North American summer crops. Losses in world soybean prices were especially marked, partly reversing some of the sharp gains recorded in May and June, as the market responded to a potentially beneficial weather outlook for August.”