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FAO‘s latest forecast for global cereal production in 2018 is pegged at 2 601 million tonnes, up nearly 10 million tonnes from the previous month’s forecast, but still 57 million tonnes (2.1 percent) below the 2017 record level. The monthly change was primarily driven by upward revisions for wheat production in Canada and China more than compensating downward revisions in Australia and the EU.

World wheat production in 2018 is now forecast to approach 728 million tonnes, down 4.3 percent from 2017. For next year, the winter wheat crop is currently being planted in the Northern Hemisphere. Generally remunerative prices are expected to stimulate an increase in plantings in the EU, the United States and India, while weather-related concerns could hamper sowings in parts of China and Pakistan.

World production of coarse grains is forecast at 1 360 million tonnes in 2018, down 2.2 percent from 2017, while up marginally from October, mostly on a higher outlook for maize as well as for barley, which, however, remains at a six-year low. For 2019, coarse grain crops are currently being planted in Southern Hemisphere countries. Early prospects indicate an expansion in maize plantings in South America, buoyed by robust export demand, and in South Africa, resting on higher prices and crop rotation practices; however, concerns associated with a potential El Niño event weigh on prospects.

There have been only minor adjustments to FAO’s rice production outlook since October. As a result, global rice output in 2018 continues to be forecast to surpass the 2017 all-time high by 1.3 percent to reach 513.0 million tonnes. The increase is envisaged to be led by area expansion, owing to more remunerative prices, and smaller losses incurred as a result of inclement weather, especially in Asia.

The 2018/19 world cereal utilization forecast has been raised by 0.2 percent to 2 653 million tonnes, up 39 million tonnes (1.5 percent) from the estimated level for 2017/18. Higher feed and industrial uses of maize make up the bulk of the anticipated rise in global cereal utilization, from both the previous season and last month. In fact, global utilization of coarse grains is expected to peak in 2018/19, reflecting robust demand for feed and industrial use, especially in China and the United States. Total wheat utilization is expected to increase marginally in 2018/19, with the global growth in wheat feed use in retreat due to large supplies of cheaper alternatives. However, wheat use for food consumption is expected to increase by 1.0 percent, resulting in a relatively stable average per caput level. Global rice utilization in 2018/19 remains pegged at an historical high, up 1.1 percent year-on-year, with food use projected to account for all of this increase, expanding at a slightly faster pace than global population.

The forecast for world trade in cereals has been lowered slightly since last month, to almost 416 million tonnes, which would be down 4.5 million tonnes (1.1 percent) from the 2017/18 record level. The downward revision mainly reflects expectations for smaller wheat trade than was earlier anticipated. World wheat trade is now forecast to contract in 2018/19, albeit from the record levels achieved in the past two seasons, to 173 million tonnes, 3.4 million tonnes lower than in 2017/18 and almost 1 million tonnes below the October forecast. The month-to-month drop reflects downward adjustments to imports by several countries, including India, Indonesia and South Africa. World trade in coarse grains in 2018/19 is still forecast to remain close to the 2017/18 record level, at around 195 million tonnes, underpinned by an anticipated rise in maize trade, offsetting a decline in sorghum. World trade in rice in 2019 is currently predicted to contract by 1.3 percent, to total 47.3 million tonnes, as larger African and Near Eastern purchases are foreseen to only partly compensate for subsiding demand from a few Far Eastern buyers.

The forecast for world cereal stocks, by the close of seasons in 2019, has been raised from October by 10.6 million tonnes (1.4 percent), to almost 762 million tonnes, but still down substantially by 53 million tonnes (6.5 percent) from their record high opening level. The latest revisions reflect higher forecasts for wheat and barley (mostly in China), more than offsetting lower forecasts for maize and sorghum. While the forecast for global wheat inventories has been raised by 9 million tonnes since the previous report, total wheat stocks would still decline by at least 12 million tonnes (4.5 percent) from their record high opening level, to 264 million tonnes. The year-on-year drawdown in wheat stocks is expected to be concentrated among the major exporters. As a result, for the major wheat exporters, the ratio of closing stocks to their total disappearance (defined as domestic utilization plus exports) – a measure of global market availabilities – is forecast to fall to a five-year low of 16.3 percent. Total inventories of coarse grains are also forecast to fall in 2018/19, marking the first decline since 2012/13. Maize would account for the bulk of the contraction, much of which is seen to be concentrated in major exporting countries and in China, consistent with the country’s maize destocking policy. By contrast, world rice stocks at the close of 2018/19 are envisaged to reach a new high of 176.6 million tonnes, up 2.6 percent from their opening levels while unchanged from October’s forecast.

1/ Production data refer to the calendar year of the first year shown. Rice production is expressed in milled terms.

2/ Production plus opening stocks.

3/ Trade data refer to exports based on a July/June marketing season for wheat and coarse grains and on a January/December marketing season for rice (second year shown).

4/ May not equal the difference between supply and utilization due to differences in individual country marketing years.

5/ Major wheat exporters are Argentina, Australia, Canada, the EU, Kazakhstan, Russian Federation, Ukraine and the United States; major coarse grain exporters are Argentina, Australia, Brazil, Canada, the EU, Russian Federation, Ukraine and the United States; major rice exporters are India, Pakistan, Thailand, the United States, and Viet Nam. Disappearance is defined as domestic utilization plus exports for any given season.

Black Sea Trade Flows (BST Flows)

FeedDinner 2019