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IGC Grain Market Report

29 May 2015

IGC Grain Market Report - 29 May 2015IGC Grain Market Report - 29 May 2015

International Grain Council Grain Market Report


Despite some market uncertainties in the past month about crop outlooks in certain regions, especially in North America, world total grains (wheat and coarse grains) output prospects remained generally favourable. Amid mostly good weather, upward revisions in the EU, the CIS, Brazil, North Africa and China boost the projection for global production by 21m t m/m (month-on-month), to 1,968m, only 2% short of the previous year’s record.

About half of the increase in supply since last time is absorbed by greater projected use, mainly for feed, with consumption now seen marginally higher y/y (year-on-year), at 1,981m t. The forecast for carryover stocks is lifted to 426m t, only a small contraction y/y. At 308m t, grains trade is placed 2m higher m/m, and only modestly down y/y.

In the Council’s first projections for 2015/16, world rice output is seen increasing to a record of 482m t on larger outturns in key Asian producers. With food demand expected to boost total consumption to a peak of 489m t, aggregate end-season carryovers are set to contract by 7%, to a six-year low, including another steep drop in major exporters’ inventories. Traded volumes in 2016 are anticipated to be only fractionally below the forecast for the current year as competitively priced supplies likely stimulate above-average shipments to Africa and Asia.

With yields in key producers unlikely to match the current season’s exceptional results, world soyabean output in 2015/16 is projected to fall slightly. Nevertheless, with the anticipated increase in total supplies set to exceed that of uptake, world carryovers are seen rising by 9% y/y, to a peak of 52m t, including an increase of more than one-fifth in the major exporters, led by the US. Prospects for trade will again be shaped by China’s needs, with global volumes expected to expand by around 4% y/y, to a record of 123m t.

World export prices remained weak during May, pressured by prospects for continued ample supplies in the year ahead. The IGC Grains and Oilseeds Index (GOI) fell by 4% m/m.

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