The Food and Agriculture Organization (FAO) has significantly increased its harvest estimate for coarse grains compared to its previous estimate in July. The adjustment is primarily due to a higher forecast for grain maize production in the United States.
In its new September grain report, the FAO states that both hectare yields and areas of grain maize are higher than previously anticipated. Forecasts for Brazil and Mexico have also been revised upwards.
However, the harvest forecast for grain maize in the European Union has been revised downwards. Dry weather and higher-than-average temperatures are depressing yields in the EU. According to the EU, these conditions are resulting in fewer hectares of maize being harvested in the EU. Combined with lower yields, this results in lower production than anticipated.
6% more than last year
The total coarse grain harvest is now estimated at over 1.600 million tons. This is 36 million tons more than the previous estimate in July. The new estimate represents an increase of 89 million tons (6%) compared to last year.
The FAO anticipates that a large portion of the production increase will be offset by a further rise in consumption. However, the Food and Agriculture Organization (FAO) also expects stocks to increase. Currently, FAO experts predict stocks will grow to 367 million tons by the end of the season. This will bring stocks back close to the level at the end of the 2023/24 season.
Expectations for wheat are in line with July's forecasts. Global production is estimated at 805 million tons, 7 million tons more than last year. Consumption forecasts have been raised slightly, and at 803,5 million tons, they are close to production.
Unfavorable weather conditions have led to a downward revision of the wheat harvest forecast in China. Furthermore, the wheat acreage in Argentina is smaller than previously anticipated. However, these adjustments are being compensated by the European Union, where yields are ultimately higher than anticipated.
Lower prices
Meanwhile, the FAO's World Food Price Index for grains continues to decline. In August, the index fell to 105,6 points. This puts the price barely 6% above the level from 2014 to 2016, which serves as the basis for calculating global commodity prices.
Except for a small uptick in April, grain prices have been declining month after month. Since February, the average price level has fallen by about 6%. Falling wheat prices are the main cause of this decline. Corn prices, on the other hand, have been rising for the third consecutive month.
Corn prices are being supported by the heat waves that are hampering production in the EU. Moreover, there is increased demand for grain corn for animal feed and ethanol production, especially in the United States.
Barley prices are also rising globally, although this hasn't yet been reflected in local prices in the Netherlands. Here, barley prices are currently under pressure, hovering around €180 per tonne.
Wheat prices are suffering from a surplus of supply on the global market. Yields are higher than previously forecast, particularly in the EU and Russia. On the other hand, demand is hesitant. Importers in Asia and North Africa, in particular, are showing little appetite, according to the FAO.