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May 29, 2020 | FBN Insights | Kevin McNew

International Grains Council Raises Grain Stocks Forecasts

Improved corn crop outlooks for U.S. and China helped to trigger upward revision

International Grains Council Raises Grain Stocks Forecasts 

  • IGC raised its grain production forecast by 12 million tonnes to 2,230 million tonnes while consumption was trimmed by 4 million tonnes to 2,218 million.
  • IGC increased its forecast for global corn production in the 2020/21 season by 11 million tonnes to 1,169 million tonnes.
  • Global corn consumption was seen at 1,177 million tonnes with global stocks seen declining by 9 million tonnes to 288 million tonnes. 
  • The council projected world wheat production at 766 million tonnes, up from its previous projection of 764 million.
  • Wheat stocks were seen rising by 16 million tonnes to 290 million tonnes, more than offsetting the decline in corn.
  • IGC estimates global soybean production in 2020/21 at 363 million tonnes, well above the 336 million seen last year.

FBN’s Take On What It Means: The council was looking for a marginal global grains deficit for the 2020/21 season in its previous report issued in late April. Improved corn crop outlooks for the United States and China helped to trigger the upward revision to the global grain production forecast while IGC reported the consumption outlook was lowered "owing to the weaker outlook for the industrial sector.” If forecasts are realized it would result in the first increase in world grain stocks in four years. This is just another reminder that the effects of the coronavirus are likely to linger and producers should be looking for opportunities to forward price grain. 

Argentine Corn Crop Reported Steady

  • Buenos Aires Grain Exchange reported corn harvest is 47% complete vs 44% last week and 36% average.
  • Crop conditions were seen as steady compared to last week at 37% good to excellent.
  • The exchange maintained their corn crop production forecast at 50 million tonnes, which is in line with the May USDA report.
  • Argentina is on pace to export 3.7 million tonnes of corn this month compared with 3.9 million last month and 3.9 million last year.

FBN’s Take On What It Means: Slower exports in Argentina taken together with a small shipping lineup in Brazil and firm prices in Ukraine should help the US export program in the months ahead. While not a game changer, robust sales will be needed to combat the expected increase in US new crop corn stocks.  

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