Jun-2024: USDA updates world grain market 2024/25: consumption above production.
In its latest June issue, the US Department of Agriculture (USDA) revised its 1st estimate of world grain supply in May. The latest figures show a harvest of 2,301 million tons, compared to global consumption of 2,311 million tons. The shortfall leads to a reduction in stocks. The supply figure (including China) falls to 25.5% final stocks to consumption and is the lowest result since 2015/16.
Global wheat production was cut by just under 8 million compared to the May estimate, but remains slightly higher than in the previous year. The decisive cuts were made in Russia and Ukraine. The EU wheat harvest was also downgraded. All three countries are among the leading export regions, meaning that exports will be significantly lower in the coming grain marketing year. The USDA estimates a global reduction in exports of around 9 million tons.
Global wheat consumption is estimated to be only -4 million tons lower. As a result, the remaining stocks of wheat will decrease. This will result in a tighter global supply situation with a corresponding impact on pricing.
The global maize harvest is estimated at 1,220.5 million tons (previous year: 1,228.1 million tons). Consumption is slightly higher at 1,222.1 million tons. This will also result in a reduction in global reserves.
The USA remains the world's largest maize producer with 377 million tons and exports around 55 million tons. It is followed by China with a harvest of 292 million tons and an import requirement of 23 million tons. Brazil, with a first and second harvest, has an unchanged 127 million tons and exports 51 million tons. Only then does the EU-27 follow with a result of just under 65 million tons and an import requirement of just under 22 million tons.
An increase to 290 million tons was recorded for the rest of the grain market, thus matching the previous year's result.
The even tighter supply situation on the global grain market will keep future price levels high. Paris market prices for wheat below € 200/t are highly unlikely, as are prices above € 280/t. If one follows an old market experience, then the global supply figure provides an orientation for the price level in the event of little market disruption. With 25.5% final stocks for consumption, a market price level (Paris) in a range between € 230 and € 265/t of wheat could result.
