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IGC Sees 10% Rise in Total World Grain Supplies

09:21AM Jan 30, 2014

The International Grains Council (IGC) today increased its forecast for total grains (wheat and coarse grains) output for 2013-14 by 18 MT to 1.964 billion MT. If realized, the IGC says, this would be a 10% increase compared to a year earlier. The rise includes an 8% increase for wheat and 11% for corn. The IGC notes exceptional yields in Canada as the prime reason for the increase. But the IBC notes logistical problems in transporting that country's crops to export markets will result in a sharp rise in carryover supplies. Overall global grain stocks are seen rebounding by 54 MMT, 16%, to 387 MMT, which is equivalent to 20% of global demand, IGC states.

Despite logistical difficulties in Canada and elsewhere, the projection for global grains trade has been raised to 284 MMT, surpassing the previous high in 2011-12, IGC notes. Wheat trade is expected to increase by 4% to 147 MMT, including, despite the issues, a 15% increase in Canada’s shipments.

While the forecast for China’s corn imports has been lowered, given recent rejections of U.S. shipments by quarantine authorities, the projection for global trade has been increased to 108 MMT, up 13% annually, on solid demand elsewhere, IGC states.

The soybean output forecast is revised yet higher, to a record 288 MT, with bumper crops in all major exporters. Trade is seen rising by 12% to an all-time high, driven by an expected rebound in China’s demand. But the IGC notes its expects a significant portion of outstanding U.S. sales to China are likely to be canceled and switched to other origins.

Other key features from the report:

The forecast for 2013-14 world wheat production has been revised up by 9 MMT to a record 707 MMT. World wheat consumption is placed 1 MT lower, but at 691 MT would be up 3% versus a year earlier. Global carryover is raised 7 MMT, to 188 MMT, with larger projections for the major exporters and India, and trade is now forecast to reach a record 147 MMT. In 2014-15, the total wheat harvested area is forecast to increase by 2%, but production is tentatively expected to fall by 1% to 697 MT, on a return to average yields.

Despite forecast declines in South America, global corn output is forecast up 11% in 2013-14, led by a major yield recovery in the US., IGC says. Amid strengthening demand from feed and industrial users, global consumption is expected to rise by an unusually strong 7%, but total world ending stocks are still forecast to return to much more comfortable levels, IGC notes. Trade is on course to break all previous records, with Jul/Jun shipments placed at 108 MT, an increase of 13%.

Global soybean output is forecast up 6% in 2013-14, to a record 288 MMT, with bumper crops in major exporters, while ending stocks are set to increase for the second consecutive year, states IGC. Global soybean trade in 2013-14 (Oct/Sep) is forecast to rise by 12%, driven by an expected rebound in China's demand. Reflecting a sharply higher figure for Canada, global rapeseed/canola production is seen rising by 11% in 2013-14, allowing a 58% increase in end season stocks, IGC concludes.