World Update
HIGHLIGHTS
Including upgrades for wheat and maize, the forecast for world total grains (wheat and coarse grains) production in 2020/21 is raised by 9m t m/m (month-on-month), to 2,224m, an increase of 2% y/y (year-on-year). Because of increased consumption, projected total grain carryover stocks at the end of 2020/21 are 2m t lower m/m, at 609m (-8m y/y). The outlook for trade (Jul/Jun) is boosted by 4m t m/m, to 416m (+6% y/y), including higher shipments than before of wheat, maize and barley.
The first full set of total grains supply and demand projections for 2021/22 point to record production, at 2,287m t, up by 3% y/y. However, larger supply is expected to be entirely absorbed by higher use, leaving global stocks unchanged y/y.
With upgrades for Brazil and India more than offsetting a reduction for Argentina, global soyabean production in 2020/21 is forecast fractionally higher m/m, at 361m t (+7% y/y). With the net increase in supplies matched by an uprated figure for use, stocks are steady m/m, at 45m t (-7m y/y). Trade is raised slightly, to 170m t, matching the prior year’s record. World harvested area is projected to expand by 4% y/y in 2021/22, as production reaches a high of 383m t. While some replenishment of stocks is anticipated, major exporters’ inventories are likely to remain tight. Trade is predicted to rise by 2% y/y.
The forecast for global rice consumption in 2020/21 is raised m/m, with ending stocks trimmed slightly, to 174m, broadly steady y/y. Amid prospects for increased plantings in key exporters, world production in 2021/22 is seen increasing by 1% y/y, to a peak of 510m t, with total use and inventories potentially at new highs. Trade in 2022 is projected at a high level on African demand.
The IGC Grains and Oilseeds Index (GOI) fell by 3% m/m. All the component sub-Indices weakened m/m, with the largest falls for wheat and barley.
OVERVIEW
At a record 2,224m t, world total grains (wheat and coarse grains) production in 2020/21 is expected to be 39m larger y/y, including record harvests of wheat, maize and barley. A fourth consecutive drawdown of world carryover stocks is envisaged, to 609m t, down by 8m y/y entirely owing to a further depletion of maize inventories. Trade is forecast to reach a record 416m t (+22m y/y), with shipments of wheat and maize at records.
The Council's first assessment of world total grains supply and demand in 2021/22 projects a 62m t rise in production, to 2,287m, including new highs for wheat and maize. Increased food, feed and industrial uses are seen lifting total consumption by 54m t y/y, to 2,286m. At 609m t at the end of 2021/22, global stocks are projected to be unchanged y/y. Including reduced shipments of wheat and barley, global trade is seen declining by 6m t y/y, to 410m.
Principally tied to bigger outturns in the US and Brazil, 2020/21 world soyabean production is seen at 361m t (+7% y/y), fractionally short of the 2018/19 record. With consumption expected to advance, stocks are set to fall for a second successive year, with US inventories plunging after a season of heavy exports. Trade is seen steady y/y, at a high of 170m t. With elevated values likely to result in a significant supply response, world acreage could expand by 4% y/y in 2021/22 as output increases to a peak of 383m t. As total use expands, only a modest recovery in stocks is anticipated, with inventories in key exporters remaining thin. Trade is seen at a new high, with China’s imports again exceeding 100m t.
Reflecting bigger crops in exporters, global rice production in 2020/21 is forecast 1% higher y/y, at a peak of 504m t. Including an expansion of feed use, uptake in China is seen edging up as world consumption rises further, while inventories are expected to be little-changed y/y. With firmer buying from importers in Asia and Africa, trade is anticipated to rise by 4% y/y in 2021. Outlooks for 2021/22 remain tentative, yet bigger sowings in Asia could boost global production, with total use and stocks also projected at new peaks. Trade in 2022 is predicted to stay high on African demand.
MARKET SUMMARY
With a softer tone across all markets, most notably wheat and barley, the IGC GOI eased by 3% in March, but with average grains and oilseed prices still sharply higher y/y.
The IGC GOI wheat sub-Index dropped by 6% m/m on generally favourable 2021/22 production prospects and signs of a slowdown in nearby export demand.
Partly linked to seasonal pressure in Argentina, the IGC GOI maize sub-Index dipped by 2% m/m.
The IGC GOI rice sub-Index fell by 1%, predominantly on weaker quotations in Thailand, where offers fell on tepid demand and off-season crop harvesting.
Weighed mainly by softer prices in Argentina and Brazil, the IGC GOI soyabeans sub-Index eased by 3% m/m.