FAO’s latest forecast for global cereal production in 2018 is pegged at a 3-year low of 2 587 million tonnes, despite a small (1.2 million tonnes) upward revision since July. This month’s forecast puts global cereal production at 64.5 million tonnes, or 2. percent, below last year’s record high level.

FAO’s forecast for world wheat production in 2018 has been lowered by 14 million tonnes (1.9 percent) compared to the forecast made in July and now stands at almost 722 million tonnes, the smallest crop since 2013. Most of this downward revision stems from developments in the EU, where dry and hot weather during the summer months intensified yield reductions in northern countries, resulting in a cut to the production forecast by 6 percent (9 million tonnes); the EU wheat output is now forecast at 138 million tonnes, the lowest level since 2012. Production forecasts for Australia, China and the Russian Federation have also been lowered, mostly on account of unfavourable weather, while upward revisions were made for Argentina and the United States.

World production of coarse grains in 2018 is forecast by FAO at nearly 1 354 million tonnes, 15 million tonnes (1.1 percent)) up from July’s forecast, but still 36.4 million tonnes (2.6 percent) below the previous year’s level. The recent upturn in production prospects since July mostly reflects improved outlooks for maize in China, Ukraine and the United States, where improved weather has lifted yield forecasts. Expected output increases in these countries more than offset reductions in forecasts for the EU and the Russian Federation, where moisture deficits have curbed yield expectations. The outlook for global barley production in 2018 has been lowered slightly, mostly reflecting lower than previously expected yields in the EU, due to the dry and warm weather conditions, while the forecast for world sorghum production remains virtually unchanged.

Following a small upward adjustment since July, FAO’s new forecast of world rice production in 2018 stands at 511.8 million tonnes, up 1.3 percent from 2017 and representing an all-time high. At a country level, improved yield prospects are now anticipated to translate into larger output recoveries in Bangladesh and Viet Nam than earlier anticipated, whilst planting estimates also point to stronger area rebounds than previously foreseen in Sri Lanka and the United States. By contrast, the outlook is down for Egypt, where official efforts to preserve water and competition with cotton are estimated to have cut rice plantings more steeply.

The forecast of world cereal utilization has been raised by 7 million tonnes (0.3 percent) to 2 648 million tonnes, up 30 million tonne tonnes (1.2 percent) from 2017/18. The bulk of the latest revision, as well as the anticipated expansion from the previous season, relates to maize. Larger maize feeding and higher industrial use are expected to raise total maize utilization to 1 105 million tonnes, nearly 14 million tonnes (1.3 percent) over the July forecast and 30 million tonnes (2.8 percent) higher than in 2017/18. The expected higher use of maize for feed in 2018/19 is seen to more than offset anticipated reductions in feed use of other major cereals, in particular barley, wheat and sorghum. Rice utilization in 2018/19 is forecast to grow by 1.1 percent to 509.6 million tonnes, a level sufficient to maintain global per capita food intake of rice largely stable at around 53.9 kilos.

Since the previous report in July, the forecast of global cereal stocks by the close of the seasons ending in 2019 has been lowered by 7.1 million tonnes, to a 4-year low of 741.8 million tonnes, down as much as 65 million tonnes, or 8 percent, from their record high opening levels. This would result in the global cereal stock-to-use ratio sliding to 27.3 percent, the lowest since 2013/14. Most of the projected decline in 2018/19 is the result of reductions foreseen in China, the EU and the Russian Federation. This month’s downward revision in projected wheat production has prompted a significant revision to the forecast of wheat stocks, now pegged at 252 million tonnes, which would be down nearly 12 million tonnes from July and 21.4 million tonnes (7.8 percent) from their all-time high opening levels. At the current forecast level, the ratio of major wheat exporters’ closing stocks to their total disappearance (defined as domestic utilization plus exports), which is considered a good measure of availability in global markets, would drop to a 6-year low of 15.3 percent, well below the 20.8 percent estimated for 2017/18. By contrast, the FAO forecast for maize inventories has been lifted since July by almost 7 million tonnes. However, despite this increase, global maize reserves would still fall significantly (by 13.6 percent) below their opening levels, dropping to 267 million tonnes, which would make them hit their lowest level in six years. By contrast, global rice reserves at the close of 2018/19 are expected to expand for the third successive season to 173.4 million tonnes, owing to replenishments in importing countries, China and Indonesia in particular, and in major exporters, such as India and the United States.

FAO’s forecast of world trade in cereals in 2018/19 has been increased to nearly 414 million tonnes, 1.7 million tonnes more than was reported in July. The upward revision largely reflects an increased trade forecast for maize, more than offsetting a downsizing of trade prospects for wheat, rice and sorghum. Nonetheless, at the current forecast level, world trade in cereals in 2018/19 would still be some 6.4 million tonnes (1.5 percent) below the previous season, which was a record. Among the individual cereals, trade in wheat in the current marketing season is seen heading for a 1.8-percent contraction (3.2 million tonnes), while sorghum trade is likely to decline by 14.4 percent (1.1 million tonnes) and rice by 1.1 percent (518 000 tonnes).