From the EU to the Urals, drought is hurting wheat and barley crops, said the International Grains Council, forecasting the smallest world grain crop in three years and the smallest “carry-over” supplies in four years. China’s “prohibitive” tariff on U.S. soybeans will cut U.S. exports by 6 percent in the year ahead and inflate U.S. stockpiles because alternative markets will not take up the slack, the group said.
In its monthly Grain Market Report, the IGC said it may reduce its forecast of the world crop in the future because of the disappointing yields seen so far as crops are harvested. As part of its forecast of a total grain crop of 2.059 billion tonnes — 2 percent less than last year and the smallest since 2015 — the IGC said that wheat production would see a particularly steep decline of 5 percent, to 721 million tonnes. Production of barley, oats, and rye will also fall.
Even as trade disputes reduce U.S. soybean exports, the world is headed for a record-large crop of 359 million tonnes in 2018/19, based on expectations of larger plantings in South America, said the IGC. “China’s overall world market purchases may be fractionally smaller year-on-year, with alternative feed ingredients potentially filling the shortfall.”
The IGC forecast U.S. soybean exports of 56.2 million tonnes in 2018/19, down from the 60 million tonnes it predicted in its previous report. China was forecast to import 97.5 million tonnes of soybeans, down from the IGC’s previous estimate of 101 million tonnes. In early July, the USDA slashed its forecast of U.S. soybean exports by 11 percent.