The International Grain Council (IGC) has raised its total global grain carryover forecast for 2013-14 by 2 MMT from last month to 367 MMT, up from 330 MMT in 2012-13. The group raised its global wheat carryover forecast by 4 MMT from last month to 180 MMT (175 MMT in 2012-13), which was slightly offset by a 2-MMT reduction to global corn carryover to 148 MMT (121 MMT in 2012-13). Meanwhile, the group trimmed its 2013-14 global soybean carryover projection by 3 MMT from last month to 29 MMT, which is up 3 MMT from 2012-13.
For wheat, IGC raised its global production estimate by 2 MMT to 693 MMT on increases to the CIS and EU. It also said it sees increases to China's wheat imports, but said global demand will be stable overall as declines are expected elsewhere. Meanwhile, IGC trimmed its global corn production forecast by 2 MMT to 943 MMT, which is still up 9% from year-ago. IGC left its corn trade and consumption forecasts unchanged from last month, which are still up from year-ago levels.
In a special report on Chinese demand prospects, IGC says its grain needs are expected to rise sharply in 2013-14. The report states reports of poor milling-quality wheat are behind rising wheat needs and says despite a record corn harvest, high domestic prices and internal transportation costs make imports of corn cost competitive. It notes, "China’s Agriculture Minister recently announced that, with demand for meat and industrial products expanding, a gradual increase in maize (corn) imports could be expected in the coming years. Separately, a researcher from the State Council’s Development and Research Centre speculated that, while the self-sufficiency in staple grains should be maintained and no timeframe was given, annual imports could rise to as much as 20 MMT to 30 MMT."
Additionally, the report states: "However, despite a further drop in world (corn) prices, buying interest has recently slowed, with some local traders reporting that private feedmills have now used their allocated 2.9 MMT share of the 2013 TRQ (tariff rate quotas) of 7.2 MMT. The same sources suggest that around 2.6 MMT of licenses have been allocated to state-owned enterprises. Note that most maize imports in recent years have been sourced by state-owned enterprises. Assuming that imported maize remains favorably priced into next year, trade activity is likely to pick up again ahead of the 2014 TRQ allocations."