IGC: 1. Estimate of the grain market 2019-20 - further reduction of stocks! The International Grains Council (IGC) has issued in its March issue an initial estimate of production, consumption, trade and final stocks for the grain year 2019-20 . A precursor to this issue was exclusively related to global wheat supply. For the year 2019/20, a worldwide grain harvest (excluding rice) amounting to 2.175 mill . t predicted. This is an increase from the previous year of approx. +50 million t . However, this does not yet reach the highest ever world production of 2,187 million t in 2016/17. On the demand side , the IGC estimates a volume of 2,204 million tonnes . (Previous year 2,170 million t.), Which is mainly caused by the increasing consumption of corn. Consumption above harvest of around € 30 milliont leads to a further reduction in existing stock of approx. 600 million t to around 575 million t. According to current estimates, this will not fundamentally improve the supply situation in the coming financial year, but will remain at least as tense as in the year just ended. In the wheat sector , the IGC expects a harvest of 759 million t. 24 million t higher than in the current year 2018/19. This is again linked to the results of the years 2016/17 and 2017/18. According to IGC estimates, wheat consumption is expected to increase by 10 million tonnes to 752 million tonnes . The net income will lead to an increase in the final balances from 263 to 270 million tonnes . It is noteworthy, however, that no inventory build-up is foreseen in the leading export areas . The calculated final wheat stock even lags far behind the good previous years.The global corn production estimates the IGC by 10 million t higher to 1,124 million t . Even in this case, the production of the previous record year 2016/17 was a few million t larger. According to the IGC forecast for 2019/20, corn consumption is to rise 14 million t higher to 1,162 million t . The shortfall for annual production will be met by the reduction of inventories , which are to fall by 39 million tonnes. Compared to the record year 2016/17, the expected final balances are approx. 100 million t or -27% back. The IGC estimate has not yet taken into account the recent floods in the US . Further unforeseeable events will also lead to further corrections during the course of the financial year. The present estimate provides a first guideline that gives rise to the assumption that a fundamental improvement in the supply situation is currently not justifiable .With future increasing confirmation of this assessment, the forward rates will be classed on the stock exchanges . That could improve the current bearish mood.
