With the world headed for record-setting wheat, corn and rice harvests, the inventory at the end of this marketing year will be the largest ever — a three-month supply that would weigh on commodity prices, said the International Grains Council. The council’s index of grain and oilseed prices, “pressured by increasing heavy spot supplies,” was near a five-month low, as farmers in the northern hemisphere report good overall yields.
“Despite further growth in demand, grains stocks are set to expand again, with those in the major exporters the biggest in seven years,” said the IGC’s Grain Market Report. The London-based council estimated global grain production at 2.069 billion tonnes, consumption at 2.049 billion tonnes, and carry-over stocks of 492 million tonnes, up 4 percent from last year.
Based largely on higher-than-expected U.S. yields, IGC raised its forecast of the world soybean crop to a record 329 million tonnes, up 4 percent from a year ago. While global grain stocks are going up, soybean stocks would decline for the second year in a row.
U.S. stockpiles of corn and soybeans are slightly larger than officials expect, say analysts ahead of today’s release of USDA’s quarterly Grain Stocks report. The report gauges supplies on Sept. 1, the opening day of this marketing year. With record corn and soybean crops forecast for this year, the carry-in stocks are a factor in U.S. supplies for the coming year. Season-average prices for this year’s corn crop are forecast to be the lowest in 10 years, while the average soybean price at the farm-gate would be the second-lowest in 10 years.