IGC Grain Market Report
20 February 2013
IGC Grain Market Report - February 2013
The IGC Grains and Oilseeds Index is virtually unchanged
month-on-month (m/m) as declines in wheat and maize have
been offset by a net gain for soyabeans.
Highlights
Slow US export demand
for wheat and maize and, more recently, prospects for improved
conditions for US winter wheat, have weighed on prices.
However, recent concerns over weather in Argentina and
potential shipping delays in Brazil have pushed soyabean prices
higher, reversing some previous losses and raising the sub-Index
3% m/m. Asian rice prices were underpinned by official support
measures.
Following minor revisions to the 2012/13 forecasts, the estimate
for total grains end-season stocks (excluding rice) has been
revised up by 4m t to 326m, including increases for both wheat
and maize. Overall, however, they remain down 40m t year-onyear
(y/y) at a six-year low, or a 17-year low for the major
exporters.
This report presents the first forecast for the 2013/14 supply and
demand balance for wheat. While world output is tentatively
projected up 4% y/y, much is expected to be absorbed by higher
demand and end-season stocks are likely to rise by just 2m t,
following a 21m decline in 2012/13.
The forecast for 2012/13 end-season maize stocks has been
revised 1.7m t higher this month, but major exporters’ endseason
inventories are still put at a 16-year low. Planting of the
2013/14 crop will soon commence in the northern hemisphere
and the global area is tentatively forecast up 0.6% y/y led by an
anticipated further expansion in the US, although spring
precipitation will be crucial in drought-affected areas.
A market focus on rapeseed/canola highlights the extent to
which 2013/14 supply and demand prospects hinge on Canada’s
crop. While output is officially forecast to expand by 17% y/y,
end-season carryovers are expected to show little change and
fundamental tightness is likely to continue to provide sustained
market support.
Summary Outlook for Key Grains and Oilseeds
Wheat
- The IGC GOI wheat sub-Index is down 5% m/m on sluggish
export demand and the prospect of improved conditions for the US
winter crop, only partly offset by firm demand for EU exports. - Upward revisions for China and India raise the global stocks
estimate to 176m for 2012/13, but this is still down 21m y/y. - World output for 2013/14 is tentatively projected up 4% y/y, but
much is expected to be absorbed by higher demand, and stocks
are forecast to rise by only 2m t. - World trade is expected to be unchanged y/y in 2013/14; Black
Sea region supplies will likely be capped by below-average
beginning stocks, underpinning demand for other exporters.
Maize
- Prices were initially supported by overly dry weather in
Argentina, but then moved lower on soft US ethanol and export
demand; the maize sub-Index is down 5% m/m. - Despite some less than ideal weather in recent months, Brazil
and Argentina are still set to harvest record crops, but global
production is forecast to decline by 3% y/y. - Due to tighter supplies, world use is expected to dip by 1% y/y,
led by reduced demand from the US ethanol sector. - With total use again expected to exceed production, closing
stocks will decline for a fourth consecutive year, including a sharp
drop in the major exporters to a 16-year low.
Rice
- Rice prices edged up with the IGC GOI sub-Index up 1% m/m,
mainly supported by government intervention measures in Thailand
and Vietnam. - At 466m t, world rice production is forecast to be little changed
y/y, as smaller outturns in Asia, particularly in India, are offset by
gains elsewhere. - World use is expected to rise by 2% y/y, and ending stocks
are forecast to fall marginally, but supplies in the major exporters
are likely to rise to a new record. - World trade in 2013 should decline by 5% as key importers in
Asia and Africa reduce purchases from last year’s highs.
Oilseeds
- Recent concerns over weather in Argentina and potential
shipping delays in Brazil have pushed soyabean prices higher,
reversing earlier losses; the IGC GOI sub-Index is up 2.6% m/m. - World soyabean production in 2012/13 is forecast slightly lower
than before, but is still up 13% y/y on prospects for bumper South
American crops. - The world carryover is projected to rise by more than 20% y/y,
but end-season stocks in major exporters are set to remain tight. - Global rapeseed/canola output in 2012/13 is forecast to decline
to a four-year low; a record crop is tentatively forecast for Canada
in 2013/14, but stocks are nevertheless likely to change little y/y.
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