Global grain stockpiles are set to swell to the largest in almost three decades, further boosting supply that’s led to a slump in prices.
World inventories of wheat, corn and other grains will reach 447 million metric tons by the end of the current marketing year, the highest since the 1986-87 season, according to the International Grains Council in London. The agency on Thursday raised its forecast by 2.8 percent from an estimate in July, when it had predicted inventories would fall from last year, citing better wheat crops in Europe and the former Soviet Union.
Wheat and corn futures in Chicago are heading for a third year of losses after back-to-back bumper global harvests and world wheat production this year will match last season’s record 720 million tons, the IGC said. European wheat crops escaped damage from heat this summer, and prospects for the U.S. corn harvest have improved, said Amy Reynolds, a senior economist at the council.
“Things are fairly comfortable overall,” Reynolds said by phone on Thursday. “Conditions haven’t always been ideal, but they’ve been good enough at the right times so that crops have generally done pretty well.”
Corn futures declined 6.2 percent this year on the Chicago Board of Trade and wheat slipped 17 percent. The commodity is trading about 6 percent above a five-year low set in May.
France, the European Union’s largest wheat grower, will harvest 41 million tons of the grain, the IGC said. That’s higher than FranceAgriMer’s outlook earlier this month for a record 40.4 million tons. Surging supplies of grain have filled up silos in Rouen and Dunkirk and sent futures in Paris to a nine-month low.
The IGC raised its total grain production estimate by 0.9 percent to 1.99 billion tons. While that’s short of last year’s record 2.02 billion tons, it will still beat consumption for a third year. World grain trade will be about 2.5 percent smaller than last year.