World wheat production and carryout stocks could be poised for record highs next season, the International Grains Council said, even as it acknowledged “concerns” over prospects for European and Black Sea crops.
The intergovernmental group upgraded by some 2m hectares, to 220m hectares, its forecast for world wheat area for 2020-21 harvests, representing growth of some 1% year on year.
The revision, which reflected “an increased [area] figure for India”, backed ideas of a “slightly larger global wheat harvest” than in 2019-20, for which the council estimates output at 761m tonnes.
The increased output means that, even though “consumption growth is assumed, there could be another stock accumulation at the end of the [2020-21] season”, the IGC said.
That would imply expansion on the record 272m-tonne stockpile expected for the end of 2019-20, with the potential for production to beat the all-time of 762m tonnes set in 2017-18.
The expectation of even more generous world wheat supplies next season comes despite official data showing a drop in US winter wheat plantings to their lowest since 1909, while excessive wetness has curtailed sowings in the European Union.
In the UK, only 60% of winter crop sowings had been completed as of last week, feed-to-grain trading group Wynnstay told Agrimoney on Wednesday.
In Russia, although farmers have managed bumper sowings, with SovEcon estimating winter wheat area at a record 16.7m hectares on a harvested basis, elevated winter temperatures have prevented seedlings building up frost hardiness, leaving them vulnerable should a cold snap follow.
The IGC noted “concerns about less-than-ideal conditions for 2020-21 crops in parts of the European Union and the Black Sea region” - worries which it said had fuelled an 8.8% rise in its wheat price index over the past month to its highest in 11 months.
While the prospect of further growth in world wheat stocks next season could be viewed as a negative for price prospects, the council highlighted expansion in countries which, with records of limited trade, are viewed as less important in setting world values.
“Inventory growth [in 2020-21] could continue to be centred on China and India,” the IGC said.
Indeed, for 2019-20, even as it proposed the prospect of record-high carryout stocks of 272m tonnes, it downgraded by 3m tonnes to 66m tonnes its forecast for inventories held in major importing countries whose supplies are particularly influential in world pricing.
A combined carryout inventory of 66m tonnes in these origins - which comprise Argentine, Australia, Canada, the European Union, Kazakhstan, Russia, Ukraine and the US – would be the lowest in at least six years.
For corn, the council raised its forecast for stocks at the close of 2019-20 by 4m tonnes to 283m tonnes, although that would still represent a 39m-tonne decline year on year.
The upgrade reflected an increase production estimate, lifted by 8m tonnes to 1.111bn tonnes, thanks to increases to Chinese and US harvests.
The overall 2019-20 world grains harvest was pegged at 2.17bn tonnes, an upgrade of 8m tonnes.