FAO estimates large world grain harvest, but average supply (Sept 5, 2013)
In its monthly harvest estimate, the FAO - the Food and Agriculture Organization of the United Nations - estimates grain production at 2,480 million tons, including rice. If rice production of just under 500 million tons is deducted, this leaves 1,995.3 million tons for cereals. This is a comparatively high figure compared to the harvest estimates of other institutions, although the different estimation and survey methods should be taken into account.
The highest estimate of 710 million tons is given for wheat. The International Grains Council (IGC) just came up with 690 million tons last week. The USDA came in at 698 million tons. In the case of other cereals, the FAO puts the figure at 1,285 million tons, which is in line with the last USDA estimate at the beginning of August. However, lower figures are expected for the upcoming USDA estimate in the 2nd week of September due to the drought in the USA.
The consumption trends also differ from the other estimating institutions, but are essentially due to methodological reasons.
The decisive factor is the overall result, which is reflected in the stock-to-use ratio. It turns out that the estimation results lead approximately to a similar judgment.
- Despite high harvest increases, the supply in 2013/14 between 18.5 and 20 % stock to use ratio can be regarded as just about average. The multi-year average for the FAO estimation method is around 21%
- In the case of wheat, the tight supply situation is classified as better than the previous year at 24%, but well below the multi-year average of 26%.
- Good average values are achieved for other cereals.
- At 14.6%, the supply figures for wheat in the exporting countries are remarkably tight compared to previous years, while average figures are calculated for other cereals.
This confirms the most recent development on the stock exchanges, which have interrupted the weeks-long downward trend, found ground and are looking for an appropriate position at a higher level.
In the foreseeable future, there are still some harvest risks to be overcome in the USA and in the southern hemisphere, with Argentina and Australia leading the way. The reports from there tell of problems in the growth phase as a result of drought. Harvests are not expected until late Nov/early Dec.
