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IGC forecasts record grain production amid challenges

21 July 20233 min reading

The International Grains Council (IGC) released its July Grain Market Report on July 20, providing insights into the global grain market for the 2023/24 season. The report indicates that total grains production is expected to reach 2,297 million tonnes, representing a 5 million tonne increase compared to the previous month's forecast. This projection is primarily driven by upgraded figures for maize and sorghum production, which outweigh reductions in wheat, barley, and oats.

The increased production forecast for maize and sorghum is largely attributed to larger acreage in the United States. Favorable weather conditions in key growing regions have boosted yield expectations, leading to a surge in output.

The global wheat production forecast for the 2023/24 season has been revised downward by 2 million tonnes to 784 million tonnes compared to the previous month's estimate. However, it is worth noting that this figure still represents an above-average level of production. The Council has also revised the world corn production forecast to 1 billion 220 million tonnes, up 9 million tonnes from the June report.

SOYBEANS AND RICE PROJECTIONS

The IGC's projections for soybeans and rice supply and demand for the 2022/23 and 2023/24 seasons remain relatively stable. While the global output for soybeans is trimmed by 2 million tonnes due to a downgraded figure for the US, trade expectations are slightly cut to 170 million tonnes. The outlook for rice supply and demand in 2022/23 remains unchanged, with stocks set to tighten on declines in China and key exporting countries. However, the 2023/24 global rice production is projected to increase to a peak of 527 million tonnes, reflecting uprated outlooks for India, Thailand, and the US.

The report highlights that world total grains production is projected to reach a new peak in the 2023/24 season, standing 38 million tonnes higher compared to the previous year, representing a 2% increase. This growth is largely driven by a predicted 64 million tonne jump in corn output, along with a rebound in sorghum production, compensating for declines in wheat, barley, and oats. 


DEMAND AND CONSUMPTION TRENDS

The demand for total grains is expected to increase in the 2023/24 season, with consumption projected to reach a record level, rising by 2% overall. This demand growth is expected to be driven by increasing needs in feed, food, and industrial uses. However, carryovers are projected to tighten for the seventh consecutive season, pegged 2% lower year-on-year at 581 million tonnes, mainly due to smaller wheat inventories. Additionally, barley stocks are anticipated to slip to a near three-decade low. And the world trade outlook for grains in the 2023/24 season remains steady month-on-month at 408 million tonnes, indicating a decline of 14 million tonnes compared to the previous year.


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