IGC: world-wide cereal stocks soon to be just above average The international cereal crop (IGC), in its latest May issue, once again estimated the global supply situation 2017/18 lower than in the previous month. Grain production is estimated to be 3% lower , while consumption is expected to remain high . As a result, approx. 34 million tonnes of inventories. The supply figure drops to approx. 23% of final consumption , which is only 1 percentage point above the long-term average.The previous year's production reductions are concentrated on the US , which is expected to earn 9.5% less grain as a result of growing crops. In the Black Sea area , a 5.5% lower harvest result compared to the previous year is expected out. Production increases in the EU, India and some smaller cultivation areas are not enough to compensate. The persistently high consumption is observed to a substantial extent in the food sector and in the industrial utilization.In the latter case bioethanol production plays an important role in the USA and more recently in China. Global wheat production fell by 2.5%. At the same time, the low US crop of -21%, which is due to the fact that it is cultivated, is of decisive importance. Lower wheat harvests are also expected in Russia and Ukraine. On the other hand, the result in India increases by more than 10% due to the favorable monsoon rain. In the EU , the wheat harvest is predicted to be just below 150 million tonnes or + 3.6% higher. According to the IGC calculations, global corn harvest 2017/18 is expected to fall by just under 40 million tonnes or -3.6%. The largest share of this is attributable to the USA with a decline in the number of appli- cations due to a build- 27 million t or approx. -7% .The US soya cultivation promises greater returns. For the EU , the IGC has now reduced the corn harvest to 61 million tonnes . This is still higher than the weak previous year, but remains clearly behind the multi-year average. EU maize imports should rise to 13 million tonnes. Far above-average corn harvests are estimated for Brazil and Argentina. The results are particularly high compared to the weak previous year. The incoming export volumes are at a high level and will be market-defining for the coming weeks and months. Barley is becoming increasingly scarce worldwide . The reduction in cultivation areas and weaker yields are a major contributory factor. In the EU, it is mainly Spain, whose harvest is estimated to be half as high as last year.The IGC estimate underlines the prospect of a decline in the previously high supply situation on the cereal sector, with the consequence of at least stable, possibly even rising prices in the coming cereal year.
