Global soybean production was forecast up by 7% year-on-year, to a peak of 336 million tonnes.
The IGC said world total grains (wheat and coarse grains) production is expected to climb to a record 2.084 billion tonnes in 2016-17, an increase of 81 million tonnes from the previous year, led by all-time highs for wheat and maize. A strong rise in consumption was predicted to a new peak of 2.056 billion tonnes (an increase of 73 million year-on-year), as large supplies and attractive prices boost feeding, while population growth contributes to higher food demand, the IGC said. A solid gain in industrial processing also was anticipated, mainly for ethanol and starch. According to the IGC, wheat and maize (corn) were expected to account for nearly all of a projected stocks expansion, with the global carryover above 500 million for the first time. Despite a potential record for wheat, a 6-million-tonne retreat in grains trade was foreseen, to 338 million, owing to reductions for barley and sorghum.
Northern hemisphere planting of winter wheat was well advanced by early December, with the preliminary forecast for world 2017-18 all-wheat harvested area showing little year-on-year change. Crop conditions were reported to be mostly favorable ahead of the winter.
With bumper crops expected in leading Asian producers, world rice output was seen rising by 3%, to an all-time high of 485 million tonnes, the IGC said. And despite an anticipated increase in total use, aggregate end-season stocks were predicted to edge higher as a contraction in the major exporters was more than offset by gains elsewhere, notably in China. Traded volumes in 2017 were expected to grow by 2% on firm demand from key importers in Asia and Africa, with India again expected to be the largest exporter, according to the IGC.
Global soybean production was forecast up by 7% year-on-year, to a peak of 336 million tonnes, including record crops in the U.S., where harvesting was complete, and Brazil. Although total uptake was anticipated to expand further, led by Asia, a solid increase in world carryovers was likely, linked to significant accumulation in the U.S., the IGC said. Trade was forecast to grow by 3%, to a fresh peak of 137 million tonnes, with shipments to China accounting for about two-thirds of the total.
The IGC Grains and Oilseeds Prices Index (GOI) was only modestly above year earlier levels, with declines for wheat, barley and rice, but increases for maize and soybeans. Pressured by ample availabilities, average wheat prices were close to 10-year lows, barley were the weakest in around six seasons, while rice quotations were the lowest in about nine years, the IGC said. Soybean markets, by contrast, were significantly higher year-on-year, as support from strong export interest more than offset pressure from a heavy supply outlook. Slightly stronger maize values year-on-year mainly reflected nearby supply tightness in South America, but a record harvest was pressuring U.S. quotations. The IGC also noted the impact on grains, rice and oilseeds prices of heightened volatility in currencies, logistical problems in some areas and a recent upturn in ocean freight costs. Although dry bulk freight markets had staged some recovery in 2016, to touch near-two year highs in November, the Baltic Dry Index was still nearly 90% below its May 2008 all-time peak amid excess tonnage capacity.
The IGC also considered administrative matters during the annual meeting, including an update on progress with its economic work program. The secretariat presented its medium-term supply and demand projections (covering the period to 2021-22). Some retreat in grains, rice and oilseeds stocks was anticipated, but global availabilities were seen remaining mostly comfortable over the next five years.
Representing the International Grain Trade Coalition (IGTC), Parry Dixon, senior economist, ADM, provided an update on the current developments in policy and trade practice. The IGC received statements from the Food and Agriculture Organization of the United Nations, Organization for Economic Co-operation and Development, World Food Program and the World Trade Organization on recent developments, and welcomed the participation of Taipei (Chinese) Separate Customs Territory as an observer.