The global production of grains is expected to be lower than previously expected, the International Grains Council reports on the basis of the new harvest forecasts. The main reason for the decrease is the sharp downward adjustment for the maize harvest in both the United States and Europe.
The International Grains Council (IGC) has reduced global grain production for the 2020/2021 season by 3 million tons to 2,22 billion tons (vs. last month). Consumption is also estimated to be 2 million tons lower and the organization foresees that closing stocks will be 1 million tons lower. The downward revisions are largely due to the lower expected maize harvest.
Corn pulls the forecast down
Compared to last month, the maize harvest is estimated to be 6 million tons lower, resulting in a yield of 1,16 billion tons. Although the downward adjustment can be called firm, it is still expected that a record harvest will be achieved. Experts estimate the yield of last season at 1,12 billion tons. The largest adjustment can be seen in the United States. There, arable farmers will take about 376,5 million tons of maize from the land this year, which is 7,7 million tons less than previously thought. Compared to last season, however, a plus of 8,8% is still visible.
The International Grains Council's harvest forecasts are still fraught with uncertainties, insiders report. This is mainly because sowing has only just begun or has yet to start in some areas. On the Chicago CBoT, the corn price fell about $1,20 to $3,63 per bushel last week.
The fact that less maize is expected is partly due to drought. This also plays a major role in the yield cuts for Europe. According to the new data, European farmers are harvesting 67,4 million tons of maize this season. In August, a harvest of 69,2 million tons was still expected. In concrete terms, the harvest in Romania decreases by 1 million tons to 13 million tons. Germany and France also lost, with 500.000 tonnes (up to 3,9 million tonnes) and 400.000 tonnes (up to 14 million tonnes) respectively.
More trade in soybeans
The expected soybean trade has increased by 1 million tons to 164 million tons, which is 8% more than last season. In particular, demand is expected from the Chinese animal feed industry. According to the IGC, production is around 373 million tons, while consumption has increased by 1 million tons to 369 million tons. Although it is expected that the United States will produce less soy, the organization still expects a higher ending stock than last year: 50 million tons (+3 million tons).