Total grain supply could hit a new record in 2016-17, the International Grain Council said, as it upped its forecast for next season’s production, increasing ideas for the corn and wheat harvest.
The IGC saw 2016-17 grain production at 2.006bn tonnes, a 9m tonne upgrade from its previous forecast, made at the start of the month.
Although would leave the market in surplus again, with supply outstripping demand, swelling ending stocks to a whopping 472m tonnes.
Heavy corn harvest
“While conditions have not always been ideal, the outlook for 2016-17 grains remains mostly good and, having been upgraded from before, global production is projected to slightly exceed the previous year,” the IGC said.
“Smaller outturns of wheat, barley and sorghum are expected to be offset by a better corn harvest.”
And the increase in demand is seen as “modest,” with higher corn demand offsetting lower wheat, barley, and sorghum feeding.
“Some uncertainties remain about world total grains supply and demand in 2015-16, largely linked to adverse weather for South American corn,” the IGC said.
“Nevertheless, the season is still forecast to end with another significant stocks increase, adding to the safety net against any unforeseen crop problems in 2016-17.”
Increased wheat forecast
The IGC upped its forecast for 2016-17 wheat production by 4m tonnes, to 717m tonnes, citing the improving outlook in the European Union and Russian.
Wheat end stocks were seen rising to 218m tonnes.
And prospects for the world corn crop were upgraded by 5m tonnes, to 998m tonnes, while ideas for consumption were cut by 5m tonnes.
The revised 2015-16 corn numbers will cancel out a downgrade to carry-in stocks, due to lower South American production.
Tighter oilseed market
But the oilseed market is likely to be tighter, the IGC said, as it increased trimmed its ideas for soybean production by 1m tonnes.
“2016-17 output is predicted little changed year on year, but with consumption likely to grow further, inventories could fall to a three-year low of 31.7m t,” the IGC said.
IGC cut 5m tonnes from its forecast for 2015-16 soybean production, bringing it to “318m tonnes, noting “the impact of poor weather in South America, notably in Argentina”, which will reduce carry-in stocks for the 2016-17 season.
And in rapeseed markets, a “much tighter scenario” is forecast, as inventories shrink by 4.4m tonnes, thanks to a steep decline in Canadian production.