Forecast calls for record harvests of wheat and maize.
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LONDON, ENGLAND — The International Grains Council (IGC) on Feb. 23 raised its forecast for total grains production to 2.102 billion tonnes, up from 2.094 billion tonnes in January, and up from 2.006 billion in 2015-16. If realized, it would be the first time output has exceeded 2.1 billion tonnes, the IGC said. Total consumption was raised to 2.069 billion tonnes from 2.062 billion tonnes.

“Australia accounts for much of this month’s adjustment, including record harvests of wheat and barley, while prospects for maize (corn) improved in South America,” the IGC noted in its
report. “Most of the increase in supply is absorbed by higher consumption, with the carryover figure only slightly bigger than before. Following an upward revision, trade is placed a fraction below the previous season’s peak.

“Conditions for 2017-18 winter crops in the northern hemisphere remained mostly favorable. Only a small fall in all-wheat harvested area is anticipated, but with a projected drop in average yields, the next world harvest is seen retreating by 2% y/y (year-on-year). Initial expectations are for a modest gain in barley area, led by a recovery in North Africa.

The IGC forecast world wheat production in 2016-17 at 752 million tonnes, unchanged from January and compared with the record outturn of 737 million tonnes in 2015-16. World wheat ending stocks were forecast at a record 236 million tonnes, up from 235 million tonnes in January and up 15 million tonnes from 221 million tonnes in 2015-16.

The IGC forecast 2016-17 maize production at 1.049 billion tonnes, up from 1.045 billion tonnes in January and compared with 973 million tonnes in 2015-16. The consumption projection was raised to 1.035 billion tonnes from 1.028 billion tonnes in January.

Improved weather in South America led the IGC to raise its forecast for world soybean production, to 336 million tonnes, from 334 million in January. The consumption projection, meanwhile, was raised to 334 million tonnes from 333 million. The IGC said global trade is expected to increase to 139 million tonnes.

The 2016-17 world outturn for rice is expected to total 482 million tonnes, unchanged from the forecast in January. The IGC said larger crops are expected in many Asian producers, with full-season output in India likely to reach a new high.

The IGC Grains and Oilseeds Index (GOI) fell by nearly 2%, the IGC said.

“Losses were tied to a drop in soybean and maize quotations, which retreated on increasingly favorable new crop prospects in South America,” the IGC said. “In contrast, world barley prices were lifted by recent strong export activity, logistical constraints and currency movements. While wheat markets also maintained a somewhat firmer tone, the rice sub-Index was broadly steady.”