IGC Cuts World Grain Stocks
The International Grains Council sees 2020/21 the world’s grain supply shrinking to 599 million from 609 million.
The forecast for world trade was raised this month by 5 million tonnes to 420 million, a 26 million increase from last year.
The agency cut its ending stocks estimate for the fifth straight season in 2021/22 down to 595 million tons, the lowest in seven years.
Including records for wheat and corn, world total grains production in 2021/22 is projected to increase 72 million tonnes to 2.292 billion.
At the same time, consumption is forecast to increase to 2.297 billion tons, resulting in the diminished ending stocks for next year.
IGC expects China’s grain imports to decrease 14% from this year’s record high to 47.7 million tonnes.
That figure includes 18.5 million tonnes of corn, 9 million of wheat and 7.2 million of barley.
FBN’s Take On What It Means: Rising feed demand and a drought-stricken Brazilian corn crop are outweighing larger harvests elsewhere. IGC’s forecast for China’s imports of grains are seen remaining elevated, but don’t line up with the current higher USDA projection. Low stocks held by grain and soy exporters and a lot of weather risk to go before good yields can be realized will likely continue to support prices.
Argentina Crop Progress & Production Update
The Buenos Aires Grains Exchange upped its Argentine soybean production forecast by 500,000 tonnes to 43.5 million.
Slightly higher than expected yields were reported in Cordoba and Sante Fe.
Soybean harvest is wrapping up with 91% in the bins.
The corn crop rating improved to 51% good to excellent from 47% last week compared to 37% last year.
About 31% of the corn crop was collected, which is well behind last year’s pace at 47% and is behind the average at 38%.
Wheat production is seen at a record 19 million tonnes, but with 10% of the crop in the ground, there is a long way to go.
Current dryness conditions are a mild concern for wheat planting progress, but Argentina is off to a normal start.
FBN’s Take On What It Means: The crops in Argentina have had a less-than-favorable year. The marginal increase in soybean production does not alter our current fundamental outlook. We still expect higher prices overall for oilseeds. For wheat, larger planted area and a recovery in production versus last year is not surprising.
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