World wheat stocks will this end this season at an all-time
high, with improved ideas for the global harvest more than offsetting
expectations of extra supplies being fed to livestock, the International Grains
The IGC, in a monthly report, raised by 7m tonnes to 211m
tonnes its estimate for global wheat inventories at the end of 2015-16, a
figure it termed "a record".
The revision reflected an upgrade to 727m tonnes in the
estimate for wheat production this season, confirming the harvest as "a third successive record" high.
This more than offset an increase of 3m tonnes, to 719m
tonnes, in the estimate for wheat consumption, reflecting largely increased
ideas for inclusion in livestock rations.
"Tighter supplies of corn," with lower production expected
in many major growing countries, "will increase interest in alternative feeds,
and use of wheat is seen at its second highest level ever, including a jump in
the European Union," the council said.
The EU has seen its own corn harvest prospects hurt badly by
a dry and hot summer in many major growing countries.
'Concerns about dry
The IGC noted that wheat prices had, despite the improved
supply prospects, gained over the past month, by 3.1%, amid concerns over
dryness in the former Soviet Union, where farmers are planting crop for the
2016 harvest, and in Australia, where combines have just begun rolling."
Selected IGC grain estimates for 2015-16, change on previous, and (year on year)
World wheat production: 727m tonnes, +7m tonnes, (+7m tonnes)
End-season wheat stocks: 211m tonnes, +5m tonnes, (+9m tonnes)
World corn production: 967m tonnes, -1m tonnes, (-38m tonnes)
End-season corn stocks: 199m tonnes, +1m tonnes, (-4m tonnes
World grains production: 1.996bn tonnes, +8m tonnes, (-21m tonnes)
End-season grain stocks: 456m tonnes, +9m tonnes, (+11m tonnes)
"Recent advances in wheat were partly tied to speculative short
covering in US futures, as well as concerns about dry weather in some countries,"
the council said.
Nonetheless, "sentiment across most markets was weighed by
bearish fundamentals, as well as worries about the world economy and how demand
for commodities might be affected".
Corn prices fell by 0.2% month on month and barley values by
1.1%, according to the council's own indices.
Indeed, the IGC restated expectations of world stocks of
grains overall ending 2015-16 at a 29-year high - although with the figure upgraded
by 9m tonnes to 456m tonnes, mainly reflecting the increased wheat inventory
The estimate for corn stocks at the end of the season was
raised by 1m tonnes to 199m tonnes, still down 4m tonnes year on year.
The upgrade reflected a decreased expectation for
consumption, which will fall in particular in the EU as farmers switch to wheat
for feeding livestock.
The production estimate was trimmed by 1m tonnes to 967m
tonnes, a drop of 38m tonnes year oin year.