IGC: Soy production estimate trimmed; wheat, corn higher

The International Grains Council (IGC) raised its 2016-17 world wheat and corn production forecasts, but cut soybeans, in updated estimates released last Thursday.

The reduction in the global soybean production estimate – down 2 million tonnes from last month to 334 million tonnes – reflects smaller crops in both the U.S. and Argentina, although partially offset by larger crops elsewhere. Total U.S. production, which was revised lower by the USDA in its own January supply-demand estimates, is now seen by the IGC at 117.2 million tonnes, down from 118.7 million, while the Argentina crop is pegged at 53 million tonnes, versus the IGC’s previous estimate of 55 million.

In its report, the IGC acknowledged the “deepening worries about the impact of adverse weather on crops in Argentina.”

Much of central Argentina has been overly wet for the past month, with particularly heavy rain and flooding this past weekend shooting Chicago soybean futures sharply higher this week.

With the cut in the production estimate, and this month’s 1-million tonne increase in expected consumption to 333 million tonnes, the IGC is now projecting 2016-17 world soybean ending stocks at 35 million tonnes, down 3 million from last month and only 1 million above the 2015-16 ending stocks level.
As for wheat, the IGC raised its 2016-17 production estimate by 3 million tonnes from last month to a record large 452 million tonnes, up 2% or 16 million tonnes from the previous year’s crop. But with estimated world wheat consumption revised higher from last month, global wheat ending stocks actually held steady from December at 235 million tonnes – still well above 221 million in 2015-16 and 205 million in 2014-15.

World corn production for 2016-17 was also bumped 3 million tonnes higher from last month, rising to 1.045 billion. But while consumption was revised higher as well, it was not enough to completely offset the gain in production. Global corn ending stocks for 2016-17 are now seen at 225 million tonnes, up from 224 million in December and 209 million a year earlier.

Overall, total world grain production for 2016-17 (wheat and coarse grains) is up 10 million tonnes this month to 2.094 billion tonnes, up 4% on the year and a new high. Total grains ending stocks for the year are forecast at 507 million tonnes, up by almost 50% from the recent low of 2012-13.