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IGC Grain Market Report

28 August 2015

IGC Grain Market Report - 28 August 2015IGC Grain Market Report - 28 August 2015

International Grain Council Grain Market Report


At 1,988m t, the forecast for world total grains (wheat and coarse grains) production is increased by 18m m/m (month-on-month), but is still down by 1% compared to last year’s record. While much of this month’s upgrade is tied to larger than expected wheat and barley crops in the CIS and the EU, projections for US sorghum and maize are also lifted from July. Following reports of worse than anticipated drought damage, estimates for maize in the EU and Ukraine and spring wheat in Canada are lowered from before.

Global consumption is seen 7m t higher than in July, at 1,985m, with use for human food, feed and industrial processing each expected at new records. Opening stocks are seen larger than before and, with not all of the growth in supplies absorbed by increased demand, the world carryover projection is raised by 12m t, to 447m, up almost 1% y/y (year-on-year). Owing to upward revisions for maize and sorghum, world grains trade is forecast 2m t higher m/m. However, with imports of wheat and barley slowing, total grain shipments may decline by 2% y/y.

The projection of global rice output in 2015/16 is trimmed but, at 479m t, would broadly match the previous year’s record. Carry-in stocks are placed higher than in July and, with total use little changed, aggregate carryovers are lifted by 0.9m t, to 96.9m. Nevertheless, this would still equate to a y/y decline of 9% and be the smallest in six seasons, mainly on a drop in leading exporters. At 42m t, world trade is anticipated to remain high in 2016 on demand from buyers in Africa and Asia.

Reflecting an upgrade for the US, the projection of world soyabean production in 2015/16 is raised by about 2m t, to 318m, only fractionally below the previous year’s record. However, due to a reduction in opening stocks and an increased forecast for total use, aggregate end-season inventories are placed nearly 4m t lower than in July, albeit still up marginally y/y and a fresh record. Trade is lifted slightly to a new peak of 125m t, but the outlook is tentative given heightened economic worries in China, the world’s biggest buyer. With pressure from mostly favourable crop prospects compounded by concerns about the global economy, the IGC Grains and Oilseeds Index (GOI) fell by 5% m/m.

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