30.
05.14
IGC: grain harvest 2014/15

Getreide Cockpit, 30.05.2014

Bullish
  • For the predominant grain crop are still high growth and Ertragsrisikken
  • Upcoming harvest volume less than in the previous year
  • Slightly rising consumption
  • Critical developments in the Black Sea region
  • El Nino-weather anomaly later in the year
Bearish
  • High opening stock 2014/15
  • good average supply indicators
  • above-average forage harvest
  • steamed corn demand in the feed and industrial use

IGC corrected estimate of the world grain harvest

The International Grains Council has the world grain harvest in his latest edition of month end may 2014 + 2 to 1,937 million tons compared to the previous month estimate raised. However, it remains that the upcoming crop 2014/15 to about 40 million tonnes or -2% lower than the exceptionally good year. The main reason is the assumption that the average Flächenerträge of the previous year in the coming harvest is not repeated, but average values are expected.

The global wheat harvest was again reduced by 3 to 694 million tons compared to the previous month. A bumper crop was retracted with 709 million tonnes in the previous year. Weak harvests in the United States, Ukraine and Russia is chiefly responsible.

The global corn harvest is estimated from the previous month at 5 955 million tonnes higher, remains but to t-15 million behind the strong prior-year result.  

The consumption estimate hardly corrected from the previous month for cereals will be compared to + 15 Mt raised to 1.935 million tonnes.

From the comparison of supply and consumption improve the end stocks slightly just below the order of 400 million tonnes.  The supply ratio stock to use ratio shall be calculated on the long-term average of 20.5%.

The closing stock of 8 leading export countries rise to 127 million tonnes compared to only around 5 million tonnes. With the previous month estimate + 10 million tonnes, had to be cut in half as a result of the surveys. Declines in the United States, Ukraine, Australia and Canada are the main reasons. This restricts the buffer potential of exports for unforeseen needs and increases the risk.

The supply situation in the wheat sector decreased by less than one percentage point, remains but with 26.8% closing stock for use in the midfield.

The corn supply is improved to a disproportionately high level of 18.2% stock to use ratio. In the good year a cheaper value was achieved by 17.5%. In the previous weak times, the values were only around or below 15%. High percentages of the improvements have the South American countries and China. The U.S. crop shall be based on the level of 350 million  t (previous year 353 million tonnes) in about to be held. Two years ago the US corn amounted to only extremely weak 274 million tonnes.

The stock quotes are not impressed by the result of the IGC, the downward momentum shows first signs of stabilization.

IGC: grain harvest 2014/15
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ZMP Live Expert Opinion

The recent IGC estimate confirms the previous forecasts of a second Getreidernte 2014/15 high initial data with + 50 million t compensate for the decline in the yield-40 million tonnes. The supply situation is based on the relevant parameters as well on average.  However, the vast majority of the coming harvest is only at the beginning of the development of production so that substantial growth and earnings risks are taken into account. Due to weather conditions, political and financial uncertainty in the Black Sea region, as well as the El Nino weather anomaly are hard to predict. Accordingly, the rear forward rates with stable trends include quite a few risk premia. The current declines of in front delivery in the wheat and corn sector reflect the current relaxation due to the average pro-Western corn order phase.

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