August 1, 2006


IGC lowers world grain stocks 



The International Grain Council (IGC) has lowered its estimate of 2006/07 global wheat, maize and total grain stocks from June.


Widespread poor growing conditions reduce last month's forecast of total grain production by 1.6 million tonnes to 15 million tonnes. Tighter supplies are expected to restrain use for animal feeding, but demand from the industrial sector, particularly for biofuels, continues to expand, according to its report.


Total grains consumption is forecast at 1,62 million tonnes, 1 million less than a month ago.


Projected world grain stocks at the end of 2006/07 are now 14 million tonnes down from last month's figure at 254 million tons, a 5.2 percent decrease.


As for wheat, hot, dry weather in a number of major producers resulted in a cut of 9 million tonnes in the production forecast to 596 million tonnes, 21 million less than last year.


Most affected are the EU, especially France and the US, where spring wheat is now suffering from the unfavourable weather.


Dry conditions are still delaying planting in Argentina, while more rain is also needed in Australia.


Forecast world wheat consumption is reduced by 2 million tonnes to 611 million tonnes.


Barley and maize are likely to replace some wheat in feed rations, especially in Europe, because of their better availability and lower prices.


In India, tight wheat supplies and high retail prices are curbing growth.


Increased import forecasts for Brazil and the EU more than offset reductions for North Africa.


Wheat exports by China and Canada are higher but there are small reductions for Australia and Turkey.


Projected world stocks at the end of 2006/07 are reduced by 3 million tonnes to 118 million, with the main changes in Australia and the EU. Compared with last year, stocks are expected to be 15 million tonnes lower.


Meanwhile, corn forecast is also adjusted at 1 million tonnes down from the 2006 production forecast of 692 million tonnes.


The deteriorating condition of the crop so far has more than offset an increase in the estimate of the planted area.


EU crops have also been affected by heat and, in France, by irrigation restrictions. However, conditions are more favourable in south-east Europe and Ukraine. China's corn, however, continues to develop well.


The total corn consumption forecast has been increased 3 million tonnes since June to 723 million tonnes (24 million more than in 2005/06) to reflect larger use in the US and the EU.


Forecast world corn trade is unchanged at 79 million tonnes, 1 million more than last season.


Import demand is mainly from countries with rising poultry numbers. With weak competition from other exporting countries, US sales (September/August) are expected to increase to 54.6 million tonnes, the highest for eleven seasons. Total stocks at the end of 2006/07 may reach a 23-year low of 94 million tonnes, 31 million tonnes down from 2005/06. Part of the cut is due to revised estimates of last season's supplies and expanded use in the US.