IGC expects fifth consecutive drawdown of grain stocks

Despite an anticipated 72-million-tonne increase in total world grain production in 2021-22, a fifth annual drawdown of grains stocks is anticipated, according to the International Grains Council (IGC) May Grain Market Report.

Total grain production is estimated at 2.292 billion tonnes, up from a downward revised estimate of 2.22 billion tonnes in 2020-21. The increased projection for global production partly offsets tighter beginning stocks.

Led by higher use of wheat and corn, global consumption is estimated to increase 59 million tonnes, to 2.297 billion tonnes, the IGC said.

Endstocks are estimated 15 million tonnes lower month-over-month to a seven-year low of 595 million tonnes.

While China’s grain imports are expected to remain high, they may not match the 2020-21 season, the IGC said, contributing to the first drop in world grains trade in three years to 415 million tonnes in 2021-22. 

Total grain production for 2020-21 was revised downward to 2.22 billion tonnes mainly because of a downgrade for Brazilian corn. That is still a 35-million-tonne increase from 2019-20.

The increased supply is expected to be more than absorbed by higher consumption, the IGC said, leading to the fourth consecutive drawdown of stocks.

World trade is estimated at an all-time high of 420 million tonnes, a 26-million-tonne year-over-year increase, led by higher-than-expected imports by China, the IGC said.

Soybean production in 2020-21 is estimated at 361 million tonnes, up 7% year-over-year. Because of smaller carry-ins and record consumption, stocks are expected to contract for a second successive year, the IGC said.

High prices are expected to encourage larger plantings pushing world output in 2021-22 to expand 6% year-over-year to 383 million tonnes.

WORLD-GRAIN

Tags: IGC, grain production, grain stock