Record-high demand for grain during the 2019/20 marketing year will draw down world grain reserves to their lowest level in five years, said the International Grains Council on Thursday. It would be the third straight year of declines in global carryover stocks.
The International Grains Council forecasts a modest decline in global grain production that will lead to a sharp reduction in the grain “carryover” at the end of 2018/19.
U.S. farmers are headed for massive corn and soybean harvests this year that will mean another year of large stockpiles and will throttle farm-gate prices into the summer of 2019, according to updated USDA projections. The bumper crops would be the latest in a string of record-setting harvests that began early this decade.
The bigger-than-expected corn crop in the United States is helping to drive world cereal grain production to a record for the second year in a row, said the UN Food and Agriculture Organization.
The International Grains Council sharply boosted its estimate of corn consumption in China, pointing to government measures expected to drive up industrial use of the grain 14 percent during 2017/18. The shift in Chinese consumption will affect grain stockpiles worldwide, said the IGC in its monthly Grain Market Report, with the first reduction in five years in the grain "carryover" at the end of the marketing year.
Larger corn crops in Argentina and the United States will push global grain production to the second-highest total ever, just a year after the record was set, said the International Grains Council, based in London. The global appetite for grain continues to grow, likely setting its own record, so the global stockpile will shrink by 5 percent, said the council’s monthly Grain Market Report.
The world’s grain stockpile will shrink nearly 7 percent by the end of the new marketing year, forecasts the International Grains Council. The reason, said the group, is a smaller harvest—down 3 percent—and the second year of record-high consumption.
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.
American wheat growers are aiming for their smallest crop in a decade at the same time the U.S. stockpile is mushrooming and world wheat supplies are at record levels. USDA is scheduled to release one of its most important crop reports of the year today and for the first time since 1988, it may call for a price-depressing wheat carry-over of more than 1 billion bushels.
Adverse weather in South America - harvest-time rain in Argentina and drought in Brazil - will reduce the global soybean crop by 1.5 percent in the current crop year, says the International Grains Council.