Grain market outlook, end October 2010
The International Grains Council has released its October 2010 grain market report. The IGC has said that the outlook for world grains supplies in 2010-11 tightened further in the past month. Although prospects for wheat and barley crops are broadly unchanged from previously, the forecast of world maize production is cut, due to reduced crop expectations in the US and China.
Wheat: With northern hemisphere harvesting nearly complete, the IGC projection of world wheat output is kept at 644 mt, a fall of 33 mt from the previous year, with reduced estimates for some countries notably the US and Australia, offset by increases for others, including China.
Maize: Reflecting worsening production prospects in the US and China, the forecast of global maize production is cut by 10 mt to 814 mt (811 mt), still a record.
Rice: At 449 mt tons, the IGC forecast of global rice production in 2010-11 is almost 5 mt lower than in September, largely reflecting a smaller-than anticipated official projection of India’s main crop.
At 1,730 million tons, global grain output is projected 11 mt lower than in September and 3% below the previous year. By far the biggest decline is in the CIS – mostly in Russia – due to the drought. Within the total, much of the fall reflects smaller wheat and barley outturns, only marginally offset by a larger maize crop. In the southern hemisphere, prospects for wheat remain favourable, except for parts of Australia, while the maize outlook improved in Argentina.
World grains consumption is projected slightly higher, at 1,785 mt, mainly because of increased feed forecasts for the EU and US. In the US, where the total includes a residual element, it is largely an adjustment for the use of early-harvested maize before the new marketing year began. However, global use of grain will be 1.5% higher than in 2009-10, underpinned by increases in all demand sectors. With global grains use set to exceed output for the first time in four years, world end-of-season stocks are expected to fall by 54 mt, to 345 mt. Nevertheless, they would still be nearly one-quarter above the 2006-07 low.
Although wheat and coarse grains prices have posted large gains since July, world grains trade in 2010-11 is projected to be marginally above the previous year’s total, at 240 mt, reflecting this month’s upward revisions for maize and wheat. World wheat trade is expected to decline, but this will be more than offset by a rise in maize import demand. A shortfall of nearly 30 mt in CIS exports is expected to be balanced by larger shipments by other exporters, notably the US, Argentina, Australia and India.