IGC cuts world grain supply 2024/25 - supply situation as it was 10 years ago
In its latest May 2024 edition, the International Grains Council (IGC) has significantly reduced global production volumes by -10 million tons compared to the previous month's estimate to 2,312 million tons. However, consumption is estimated to be only -1 million tons lower at 2,320 million tons. Stocks will fall from 592 to 580 million tons. This results in a supply figure of just under 25% final stocks to consumption; excluding China, the figure is 14%, a level last seen 10 years ago.
The situation on the global wheat market is even more critical. Global production is estimated at only 795 million tons, while consumption remains largely stable at 801 million tons. In any case, stocks will be further reduced to 260 million tons compared to the average of 273 million tons in the three previous years. The Russian harvest expectations, which have been reduced by 5 million tons, have played a major role in the cuts. The wheat harvests in Ukraine will also be smaller. The US harvest was estimated to be 2 million tons lower at just 51 million tons. In contrast, higher wheat harvests are expected in China and India.
The global supply situation on the wheat market excluding China is only just under 18% of final stocks for consumption. This will keep wheat prices high. Just two years ago, the figure was 21.7%.
Significant reductions have been made to earlier estimates of a favorable global corn supply. Global production will fall to 1,220 million tons, while consumption will rise to 1,225 million tons. Stocks are being reduced by around 10 million tons. Particularly sharp cuts of 10% were made in Argentina due to unfavorable weather conditions. In the EU-27, the high expectations in the previous month's estimate were scaled back somewhat.
The global supply situation excluding China falls to 11.2% final stocks to consumption, a clear signal of continuing high international prices.
In view of climate change and the above-average frequency of extreme weather conditions, there is still a high degree of uncertainty regarding the actual outcome of the harvest.
