IGC estimates world grain harvest essentially unchanged - ending stocks decline
In its September 2019 edition, the International Grains Council expects global grain production to remain unchanged compared to the previous month's estimate. Compared to the previous year, global grain production in 2019/20 is expected to be 0.7% higher. However, this will be offset by a 1.2% increase in consumption . As a result, inventories will be reduced by 1.2% to around 600 million tons. The price-influencing supply figure decreases from just under 30% to 27. 3% of final stocks to consumption. This describes an average supply situation.
As China holds around 52% of the world's grain stocks, which are not available for export, it is appropriate to exclude China from the supply calculation. Excluding China results in a supply figure that falls from the previous 18.3% to the current 16.5%. This is still in the mid-range over several years, even if the supply volumes are considerably smaller.
The IGC also estimates the global wheat supply to be unchanged from the previous month's figure. Compared to the previous year, volumes are up by around 4%. There is a slight increase in stocksat a global level, but not in the leading exporting countries. The supply situation in the wheat sector can be described as above average.
However, there were changes in the individual wheat-growing regions. For example, the Australian and Kazakh harvests were each reduced by 2 million tons, while the EU harvest is estimated to be 2 million tons higher and the Indian harvest 1 million tons higher. In the EU, France in particular has brought in a record harvest. In all cases, the changes have had an almost full impact on exports.
The IGC has reduced the global maize harvest to less than 1,100 million tons compared to the previous month, but has left consumption unchanged. Compared to the previous year, however, the supply situation is significantly weaker due to the reduction in stocks by 40 million tons. The main reason for this is the 15 million tons lower US maize harvest as a result of weather-related delays in sowing in May. By contrast, South American maize harvests were estimated to be higher.
The global supply situation in the corn sector is considerably below the multi-year average at 12% final stocks to consumption (excluding China).
For the EU, the IGC continues to estimate a good average maize harvest of 66.5 million tons, despite the noticeable shortfall in the northern dry belt. The record-breaking yields in the south-east are expected to compensate for this.
Corn and wheat prices on the leading exchanges are relatively stable at slightly higher levels compared to previous weeks. The trading business is starting to come to life as mills want/need to cover initial follow-up demand.
