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World wheat stocks to expand further in 2021-22

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World wheat stocks will grow to a fresh all-time high in 2021-22, backed by a record harvest, the International Grains Council said, although highlighting that expansion will be focused on China and India.

 

The intergovernmental group forecast growth of 17m tonnes year on year to a “new high of 790m tonnes” in world wheat output next season, factoring in expectations for “better harvests in Europe, North Africa and India”.

 

Consumption of wheat will grow to an all-time high too in 2021-22, potentially “boosted by rising feed use amid tightening supplies of alternatives, including maize and barley,” the council said.

 

Nonetheless, “further stock growth is foreseen” next season, with inventories expected to grow from the record high of 294m tonnes forecast for the close of 2020-21.

 

However, the IGC underlined that this expansion “will likely again be mainly in China and India”, whose inventories are viewed as less important in world pricing terms than those held by major exporters.

 

Corn vs barley

The council also forecast corn (maize) showing increased popularity among farmers in 2021-22, with “prospects for favourable returns”, backed by high prices, spurring a growth in area “for a third successive season, to an all-time high”.

 

Corn prices, as measured by an IGC index, while easing by 1.0% over the past month, remain up 49% year on year.

 

However, global barley area is, on a harvested basis, was “seen dropping to a three-year low” next season, “because of anticipated heightened competition from other cropping options”.

 

Barley prices in fact outperformed over the past month in appreciating by 7.4%, according to an IGC index, although, with 34% growth year on year, have fared less well than corn – or indeed soybeans, values of which have soared 59%.

 

Estimates for 2020-21

For 2020-21, the IGC raised its forecast for world production by 6m tonnes to 2.22bn tonnes, in the main on increased estimates for global wheat output.

 

Australia’s output was upgraded by 2.1m tonnes to 33.3m tonnes, in line with the latest Abares forecast.

 

However, “overall [grains] consumption is raised by broadly the same amount, leaving the figure for total grains stocks the same as [last month], at 611m tonnes”.

 

That still represents a “projected drawdown of 6m year on year”, the council noted, with grain exporters’ stocks seen shrinking by 12m tonnes to a multi-year low of 144m tonnes, largely thanks to declines in US corn and wheat inventories, and European Union wheat stockpiles.

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