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IGC Grain Market Report


28 April 2014

IGC Grain Market Report - 25 April 2014IGC Grain Market Report - 25 April 2014


International Grain Council Grain Market Report

Highlights

The IGC Grains and Oilseeds Index (GOI) edged slightly higher this month, as gains for maize and soyabeans offset declines for wheat and barley.

The projection for total grains output in 2014/15 has been revised down by 14m t to 1,935m, largely due to a 10m reduction for US maize, given delays to planting and the likelihood of more acreage switching to soyabeans. Global maize output is now expected to decline by 2% y/y, and inventories are seen up by a more modest 3% (previously 10%) by the end of the year.

While there are some persistent concerns over less than ideal crop conditions, especially for winter wheat in the US, overall availabilities and 2014/15 wheat crop prospects remain generally good. Despite a US weather-related mid-month rally, prices fell by 2% over the month. Output in 2014/15 is forecast to retreat by 2% from this year’s high and end-season stocks are expected to fall by 4m t. Import demand is also likely to be reduced in the absence of China’s unusually high needs in 2013/14.

Against the background of ongoing southern hemisphere harvests, 2013/14 soyabean forecasts continue to indicate record global output and trade, although overall availabilities are less ample than anticipated earlier in the year. While the forecast for Brazil has been raised this month, with main crop harvesting nearing completion and reports of good yields, Argentina’s has been reduced following less than favourable weather. Nevertheless, both crops would be the largest ever. A Market Focus outlines the official outlook for a 6% increase in 2014/15 plantings in the US, encouraged by favourable pricing relative to maize.

Rice prices in Asia were mixed during April, but the IGC GOI sub-Index was little changed m/m. The market remains well supplied with inventories in the major exporters expected to reach an all-time high by the end of 2013/14, and exceed global trade in 2014. The official projection for a 16% rise in 2014/15 US plantings is also examined in this month’s report.


Summary Outlook for Key Grains and Oilseeds

Wheat

  • Despite a mid-month weather-related rally, the IGC GOI wheat sub-Index fell by 2% m/m, as comfortable nearby supplies and favourable prospects for 2014 harvests offset some weather concerns and political uncertainty in the Black Sea region.

  • World production is projected to decline by 2% in 2014/15, to 697m t, mainly due to more normal average yields after the very high levels of the previous year.

  • Lower inventories in the major exporters contribute to a small y/y fall in the projection for world carryovers at end-2014/15.

  • Trade is placed lower y/y, at 144m, mostly because of likely reduced needs in China.

Maize

  • The IGC GOI maize sub-Index is up by 1% m/m on brisk export demand and worries about the slow start to US spring planting, but, with comfortable global supplies, prices are down 10% y/y.

  • Record crops in some of the largest northern hemisphere growers have contributed to a rebuilding of 2013/14 supplies.

  • With lower prices, world demand has also surged, with global trade forecast to reach unprecedented levels.

  • Global production is expected to decrease by 2% y/y, to about 950m t in 2014/15, as yields retreat from the previous year’s exceptional results, but stocks are likely to rise and trade remain high.

Rice

  • The IGC GOI rice sub-Index was broadly unchanged m/m as weakness in Thailand and Vietnam, due to ample export availabilities and soft demand, was offset by currency-linked strength in South Asia.

  • Underpinned by marginal increases in Far East Asia producers, world rice output is set to rise to an all-time high in 2013/14.

  • Aggregate global end-season inventories in 2013/14 are projected to be broadly steady y/y, with major exporters’ stocks especially comfortable, and set to exceed global trade.

  • Larger shipments to Far East Asia, namely Indonesia and the Philippines, are forecast to support a 4% rise in world trade in 2014, while China’s purchases will again be substantial.

Oilseeds

  • Physical soyabean markets mostly recorded modest net gains m/m, with the IGC GOI soyabean sub-Index increasing by 2%; tightening old crop supplies in the US provided support.

  • Global soyabean production is forecast at a record 282m t in 2013/14; while end-season stocks are projected to expand by 4% y/y, overall supplies are less ample than initially anticipated.

  • World soyabean trade is expected to rise by 11% in 2013/14, to 108m t, almost entirely linked to growth in Chinese demand.

  • Global rapeseed/canola output is tentatively forecast to decline by 4% in 2014/15, with average yields likely to fall short of this season’s record.

April 2014

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