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IGC Raises 2017-18 Forecast
1/18 11:30 AM
(Dow Jones) -- The International Grains Council said on Thursday that it has raised its global forecast for grain-production in 2017-18 to 2,100 million metric tons, due to better-than-expected wheat production in Russia and Argentina.
The new forecast represents an increase of 21 million tons from the forecast given in late November, but a drop from the previous season's record of 2,140 million tons, the IGC said, citing smaller planting areas and poorer average yields. Nevertheless, the IGC said that its latest forecast is the second largest on record.
The revised figure means that global grain output for 2017-18 is expected to fall 1.9% from the record.
The IGC edged up its 2016-17 monthly output forecast to 2,140 million tons in January, an increase of 6 million tons. That represents a 6.2% increase on the 2015-16 season.
Maize-production forecasts for 2017-18 rose by 14 million tons in the latest report.
The grain body increased its wheat production estimate by 8 million tons to 757 million tons.
The IGC raised its forecasts for rice by 2 million tons to 484 million tons and for soybeans by 1 million tons to 349 million tons.
While the adjustment in the IGC's maize expectations are due to a combination of a change in historical figures in China and higher-than-expected production in the European Union, the U.S., China, Nigeria and Ethiopia, a projected fall in global grain production "still represents the first contraction in five years," the body said in its report.
As for 2018-19, "a 2% fall in world wheat production is projected... and given likely firm demand, the first drawdown of stocks is predicted since 2012-13," the IGC said. "Trade is seen at a record, bolstered by growing import needs in Africa and Asia, including in India," the body added.
Wheat was last up 0.53% at $4.24 a bushel, corn was down 0.14% at $3.53 a bushel and soybeans were last up 0.43% at $9.73 a bushel.
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