The forecasts for 2018/19 corn production expectations are in. And, like 2017/18, the crop could be pretty big…
According to the International Grains Council, global corn production will be slightly higher than the 2017/18 crop.
Sidenote: the IGC did drop their estimate of the 2017/18 global corn production by 6 million tonnes to 1.048 billion tonnes, mainly thanks to the smaller crop in South America. Specifically, the IGC dropped Argentina and Brazil corn production by a combined 5.4 million tonnes.
Coming back to the 2018/19 crop, this slight increase in crop production is predicted to come with a fall in acreage to just under 459 million acres.
All things being equal, global corn acreage is at a three year low. This is mainly due to the declining area in Ukraine, US, Argentina, and China.
We have previously discussed a reduction in corn production in Ukraine, which contributes to a lower global harvest. This is significant since Ukraine is the #7 in terms of corn production in the world, as well as #4 in terms of corn exports.
However, the downgrade to corn acres is offset by an area gaining in Brazil. Corn acres there are seen climbing to 17.3 million.
It’s expected that, because of strong demand and declining acreage, global corn stocks will fall marginally in 2018/19.
Despite more conservative estimates on production and acreage, overall, 2018/19 should expect a pretty big corn crop.
World wheat output to fall this year – but not barley, rapeseed, corn production
World wheat production will fall in 2018-19 for the first time in six years, the International Grains Council said, but corn output should show modest growth, as should the barley and rapeseed harvests.
The IGC, in details of its monthly report, cut by a second time its forecast for world wheat area for the next harvest, this time by 600,000 hectares to 217.9m hectares.
The downgrade took the estimate 1.4m hectares below the 2017-18 level, and indeed to the lowest in six years.
“Difficult weather during planting is expected to have curtailed area in India, Russia, Morocco and parts of the European Union,” the council said, while forecasting a 2.2% rise to 15.5m hectares (38.3m acres) in US seedings, and 2.4% growth to 9.2m hectares in Canadian ones.
Stocks to fall
The lower area looks poised to result in a drop of some 16m tonnes year on year, to 741m tonnes, in world wheat production in 2018-19, the first decline since 2012-13.
And this in turn will prompt a fall in inventories of some 5m tonnes, to 250m tonnes.
That would represent “the first fall in six years, but still the second largest carryover in history,” the IGC said.
It added that the decline in stocks would be focussed on exporting countries – whose supplies, in being available to the world market, are particularly important for pricing prospect – while inventories in China likely see a “further accumulation”.
‘Closing stocks could tighten’
For corn, the council, in its first forecast for 2018-19, pencilled in a marginal fall in area to a three-year low of 185.3m hectares.
Area in Ukraine will ease “because of relatively poor profitability and discouraging results”, while that in the US was forecast down some 300,000 hectares to 33.2m hectares (82.0m acres) on a harvested basis.
Brazilian area was seen rebounding by 800,000 hectares to 17.3m hectares to offset falls in Ukraine in the US, and the likes of Argentina and China too.
“Assuming normal weather and trend yields, global production is projected to increase slightly in 2018-19,” the council said, although seeing output remain behind consumption, to bring a further decline in world corn inventories.
“Owing to drawdowns in the major exporters and China, world closing stocks could tighten for a second consecutive year,” the IGC said, albeit describing inventories as staying “comfortable”.
For barley, the IGC, in its first 2018-19 outlook, forecast area rising, by 900,000 hectares to a three-year high of 48.2m hectares on a harvested basis, lifted by increases in all the top producing countries – Australia, Canada, the European Union, Russia and Ukraine.
EU area was seen rising by some 400,000 hectares to a nine-year high of 12.5m hectares.
“With expanded area and assuming yields are close to the year before, world production is provisionally seen increasing by about 1% year on year,” to match roughly consumption, leaving world inventories little changed over 2018-19.
Rapeseed was also seen picking up area in Canada and the former Soviet Union lost to some other crops, with world harvested area pegged at a multi-year high of 37.1m hectares, up 500,000 hectares on this season’s total.
The council flagged a boost to the popularity of the crop in Canada from “anticipated favourable returns compared to alternatives, coupled with prospects for firm international demand”.
World rapeseed output was seen hitting 74.7m tonnes, eclipsing by 200,000 tonnes this season’s record high, the IGC said, while stopping short of making a forecast for carryout stocks.