Following this month’s further upward revision to the forecast for the 2017 global cereal production, world cereal supplies in the 2017/18 season are expected to rise to an all-time high of nearly 3 331 million tonnes. While global cereal utilization in 2017/18 is also heading for an increase (1.2 percent) from the previous season, world cereal inventories are projected to climb steadily for the fifth consecutive season, rising to a record high level of almost 726 million tonnes. The resulting stock-to-use ratio is forecast to be the highest since 2001/02..

FAO cereal production forecast for 2017 raised sharply

• FAO’s forecast for global cereal production in 2017 now stands at 2 627 million tonnes, 16.8 million tonnes (0.6 percent) higher than last year’s level, following a sharp upward revision of 13.4 million tonnes made this month.

• The bulk of the latest revision concerns coarse grains, the production of which in 2017 is forecast at 1 371 million tonnes, up nearly 24 million tonnes (1.8 percent) from 2016 and some 11 million tonnes higher than it was anticipated in November. The increase from November is mostly driven by higher estimates for maize production in the United States, following positive revisions for yields, and in Indonesia, where production is now estimated at a record high as a result of a significant expansion in plantings. These increases more than compensated for a cut to Ukraine’s maize output.

• Global wheat production in 2017 has also been adjusted upwards since November, but by a lesser degree compared to coarse grains, mainly reflecting a higher-than-previously projected output in the EU, which more than offset a lowering of production in Argentina. This year’s world wheat output is currently forecast at 754.8 million tonnes, 1 percent lower than in 2016.

• World rice production in 2017 is forecast at 500.8 million tonnes, marginally below the 2016 record and the November forecast. Although evidence of greater weather-related crop losses lowered production forecasts for Bangladesh and Madagascar, these changes were mostly offset by improved crop prospects in Myanmar, Pakistan and the Philippines.

World cereal utilization adjusted upwards

• World cereal utilization is forecast at 2 599 million tonnes, some 31 million tonnes (1.2 percent) higher than in 2016/17 and 6.4 million tonnes above the FAO November forecast. The increase from last month mostly reflects upward adjustments to overall consumption of coarse grains.

• The forecast for total utilization of coarse grains in 2017/18 has been raised by almost 5 million, largely because of upward revisions to feed use of maize. Driven by large supplies and lower prices, total feed use of maize in 2017/18 is now pegged at 592 million tonnes, 4 million tonnes more than it was projected in November and nearly 14 million tonnes (2.3 percent) higher than in 2016/17.

• Wheat utilization in 2017/18 is forecast at 740 million tonnes, slightly higher than it was projected last month and 6 million tonnes (0.8 percent) above the 2016/17 estimated level. Food consumption of wheat is set to expand by 1.1 percent, to an all-time high of 504 million tonnes.

• World rice utilization is expected to expand by 1 percent in 2017/18 to 503.0 million tonnes. Food use remains foreseen to drive the projected growth, while somewhat tighter availabilities cause all other end-uses to edge down over the course of the season.

Cereal stocks surpassing last year’s record

•World cereal stocks are projected to reach a new high of 726 million tonnes, up as much as 22 million tonnes (3 percent) from their already high opening levels and 7 million tonnes above the November forecast. At this level, the world stocks-to-use ratio of cereals is projected at 27.3 percent, up slightly from 2016/17 and the highest since 2001/02.

• Global wheat stocks (ending in 2018) are forecast to hit an all-time high of 257 million tonnes, down slightly from the November forecast but still 13 million tonnes (5 percent) above their already high opening levels. The sharp increase from 2016/17 is mainly driven by large stock buildups in China and the Russian Federation, more than offsetting drawdowns in North America.

• The forecast of coarse grain inventories (ending in 2018) has been raised to a record level of around 299 million tonnes, up 7 million tonnes from November. The increase from last month reflects higher-than-earlier anticipated build-ups of maize stocks, particularly in the United States.

• Reflecting higher anticipated carry-overs in Bangladesh, India and Viet Nam, FAO’s forecast of global rice inventories in 2018 has been raised by close to 1.0 million tonnes to 170.2 million tonnes. At this level, world carry-overs would stand 0.6 percent above their opening levels, as continued accumulations in China (Mainland) are anticipated to more than offset drawdowns in the major rice exporting countries.

Global cereal trade in 2017/18 nearly unchanged from 2016/17

• International trade in all cereals in 2017/18 is forecast to approach 404 million tonnes, nearly unchanged from the previous season’s record volume, with higher world trade in maize and rice compensating lower shipments in barley and wheat.

• World trade in wheat in 2017/18 (July/June) is forecast at 175 million tonnes, down 2 million tonnes (1.1 percent) from 2016/17, with projected sharp declines in China, India and Morocco more than offsetting higher imports by several countries.

• Global trade in coarse grains in 2017/18 (July/June) is forecast at just over 182 million tonnes, slightly down from November but still up 2.5 million tonnes (1.4 percent) from 2016/17. The decrease from last month reflects small downward adjustments to trade in barley and maize.

• World trade in rice in 2018 is now pegged at 46.2 million tonnes, up from a higher forecast of 45.9 million tonnes for 2017. Revisions to trade forecasts for both years mainly mirror expectations of higher exports by China (Mainland), Myanmar and, to a lesser extent, India