Global grain production to increase, IGC predicts

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MarketsFarm — The International Grains Council (IGC) issued projections Thursday calling for a slight increase in total global grain production for the current marketing year and for 2020-21.

The U.K.-based council forecast world production at 2.175 billion tonnes, which would be an increase of three million tonnes from its February report. The IGC said that’s largely based on higher corn production in the European Union.

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Also, the council’s March estimate was approximately 1.7 per cent higher than its 2018-19 production forecast. For 2020-21, the IGC called for total production to reach 2.223 billion tonnes.

The council pegged the global carryover at 607.9 million tonnes, for an increase of four million from February. The IGC estimated the 2018-19 carryover at 624.9 million tonnes and projected it to fall to 604.6 million in 2020-21, due to increased global consumption.

In terms of wheat, the IGC maintained its global wheat production forecast at 763.2 million tonnes in its March report. That’s 4.2 per cent more than the council’s 2018-19 wheat production estimate, with most of the change accounted for in a sizeable EU production increase. For the coming crop year, the council projected wheat production to further increase to 768.5 million tonnes.

The IGC also maintained its global wheat carryover at 274.7 million tonnes, which is 10 million more than its 2018-19 estimate. The council expects the carryover to inch up by nearly three per cent in 2020-21.

Corn production was projected to remain lower in 2019-20, largely due to a production drop in the United States. However the IGC raised its March forecast from February’s by four million tonnes to now 1.116 billion tonnes.

The council estimated 2018-19 global production at 1.13 billion tonnes and projected it to jump to 1.157 billion in 2020-21.

The global corn carryout is expected to dip sharply from the 2018-19 estimate of 323.1 million tonnes. In the IGC’s March report it put the 2019-20 carryout at 289.3 million tonnes, which is an increase of five million tonnes from February. For 2020-21, the council forecast the carryover to drop further, to 274 million tonnes, because of increased global consumption.

The council predicts global soybean production to ease in 2019-20, although by not as much as forecast last month. In its February report, the IGC said soybean production would be about 345 million tonnes, but lowered that to 340.9 million in its March report largely based on reduced production in the U.S. That’s now 21.4 million tonnes less than the council’s 2018-19 production estimate. However, it forecast bean production to jump to 366.1 million tonnes in 2020-21.

The IGC also predicted the soybean carryover to be significantly lower in 2019-20 than in the previous marketing year. The council put its March estimate at 38.2 million tonnes, about one million less than its February prediction. That’s down from the IGC’s 2018-19 estimate of 54.9 million tonnes. For 2020-21, the council forecast the carryover to increase slightly to 39.8 million tonnes, as consumption eases a little.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Glen Hallick - MarketsFarm

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting.

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