The world will see “another season of ample grain availabilities” next season, the International Grains Council said, forecasting a decline in production – but not enough to force a decline in “heavy” global stocks.
The intergovernmental group, in its first full forecast for the world grains harvest in 2016-17, pegged it at 1.997bn tonnes, taking it back below 2bn tonnes for the first time in four years.
However, output at that level, down a modest 9m tonnes year on year, would remain in line with consumption – meaning no erosion of world grain stocks, which were forecast closing this season at a 29-year high of 466m tonnes.
“World consumption is predicted to stay strong, but amid ample supplies, ending stocks will probably remain at elevated levels,” the council said.
“Preliminary projections for 2016-17 point to another season of ample global grains availabilities.”
The production forecast included a first estimate for world corn output of 993m tonnes – which would represent a rise of 21m tonnes year on year, and the third-biggest harvest on record.
Indeed, it would be sufficient to lift world stocks by a further 2m tonnes over 2016-17 to a multi-year high of 208m tonnes.
For wheat, the IGC upgraded its previous estimate by 2m tonnes, taking it to 713m tonnes – a drop of 21m tonnes year on year, but a figure only marginally behind consumption, and so allowing for only a small draw-down in global stocks over the season.
The council said it was also expecting decline in barley and sorghum sowings, in the face of “slowing demand” for the grains from China, “stemming from planned domestic policy changes” aimed at increasing demand for corn, and eroding the country’s huge corn inventories.
‘Heavy supply outlook’
The comments follow a month of recovery in prices of some grains, such as wheat, amid concerns over US weather, and amid expectations of a drop in North American spring sowings underlined by Washington data on Thursday.
However, wheat values “have rebounded only slightly from multi-year lows, with sentiment still weighed by a heavy supply outlook”, the council said.
Wheat prices, as measured by an IGC index, remain 16.0% down year on year.
Corn prices are down by 5.4% year on year, including a 1.4% drop last month.
“Better export demand provided occasional support in the US, but larger-than-expected planting intentions resulted in a late-month drop in futures,” the council said, referring to the surprisingly hefty US corn sowings estimate unveiled by the US Department of Agriculture on Thursday.
(Source – http://www.agrimoney.com/news/world-grain-output-to-fall-in-2016-17—a-little-says-igc–9469.html)