June 2022: IGC estimates world grain supply in 2022/23 to be 35 million tons lower than in the previous year
In its June 2022 edition, the International Grains Council (IGC) estimates that the global grain harvest in 2022/23 will be -35 million tons lower than in the previous year at 2,255 million tons. Global consumption is estimated at 2,280 million tons, which is 6 million tons less than in the previous year. The calculated surplus stocks fall by around 25 million tons to 583 million tons. The global supply figure falls to 25.5% of final stocks to consumption. Inprevious years, the figures were between 31% and 28%. Stocks are sufficient for around 93 days, compared to 105 days 3 years ago.
The supply situation excluding China also fell from 15.6% last year to 14.3% of final stocks for consumption. Stocks are sufficient for 55 days (previous year 58 days).
The IGC estimates the global wheat harvest at 769 million tons. In the previous year, 781 million tons were harvested. Consumption is expected to rise from 777 million tons to 789 million tons . Stocks will decrease by -9 million tons to 272 million tons, the supply figure o China will fall from 23. 5% to 21.5% of final stocks to consumption.
However, there are considerable differences in the individual production regions. In Canada , 32 million tons of wheat are expected to be harvested again after the previous year's heat-related poor harvest (21 million tons). Russia expects 85 million tons, or 10 million tons more than last year. The US harvest is also expected to increase by 2 million tons to 47 million tons. In contrast, the wheat harvest in Ukraine is estimated at 19 million tons (previous year: 33 million tons). Australia is expected to achieve only 31 million tons after last year's record harvest of 36 million tons. The Chinese wheat harvest is expected to be slightly lower. The Indian harvest will fall by 4 million tons to 105 million tons. Despite a partial balancing of increased and decreased production, the result is a tighter supply situation for wheat. The war in Ukraine continues to cause uncertainty.
The IGC estimates the global maize harvest at 1,190 million tons, almost 30 million tons less than in the previous year. Global maize consumption is expected to fall by around 8 million tons year-on-year to 1,204 million tons. Stocks are expected to fall by around -14 million tons to 271 million tons over the course of the 2022/23 maize marketing year. The supply figure will fall by 1 percentage point to around 22.5% final stocks to consumption. Just 3 years ago, the surplus stocks were around 26% of consumption. Global stocks without China will last for 39 days in future.
The maize harvest in the USA, the world's largest producer and exporter, is estimated at 367 million tons or -16.5 million less than in the previous year. In Ukraine, a decline from the previous year's 42 million tons to 25 million tons is estimated. In contrast, the Brazilian maize harvest in spring 2023 is expected to increase from 115 to 123 million tons and exports are expected to be around 5 million tons higher. A maize harvest increase of around 3.5 million tons is also forecast for Argentina.
Overall, the supply situation in 2022/23 will once again fall short of previous years. Lower production and moderately reduced consumption will lead to a considerable reduction in stocks. In the more critical economic situation caused by the war, security of supply has become increasingly important for market and price developments. The still high price level compared to multi-year averages in the past underlines this assessment. Prices are also being driven up by high freight rates.
In the past,the speculative surge in stock market prices was primarily a reflection of supply fears in an uncertain economic and military policy environment. The fundamental supply/demand figures have recently come to the fore again and are causing a strong price correction. The price increase effect of the Ukraine war, estimated at +100 $/t wheat, has halved in the meantime. However, there is still no reliable bottom in sight in terms of price formation.
