Global Crop Areas

The International Grains Council (IGC) has published its first forecasts of the global supply and demand for the 2013 harvest.  Firstly, the total grain projection is set at a massive 125 million tonnes more than last year’s crop.  With the forecast consumption rising 59 million tonnes, stocks are thought likely to rise by 31 million tonnes, so only back to levels of 2010-12. 

The 25 million tonne rise in wheat production forecast for this harvest rises above the usage (albeit by a tiny amount) but does mean a slight rebuilding of stock levels.  But it is the maize stocks that change most.  These are seen rising, by 26 million tonnes, with total availability rising to over 1 billion tonnesfor the first time (although we note this was initially forecast for last year too).  The rise in production is leading to a rise in consumption (48 million tonnes), indicating that the ‘latent’ demand for grains was there last year too had the grain been available.  However, we note the demand for maize in the US for industrial use is falling 12 million tonnes this year, demonstrating the demand for maize for biofuels is slowing.

The IGC also makes projections for soybeans for 2013/14, with an additional 26 million tonne harvest, matching demand thereby leaving stocks unchanged. We note most of the crop has not been drilled yet though. The USDA will publish their first forecasts for 2013/4 in May.

It is also worth noting that these crop forecasts are dependent on ‘normal’ weather conditions and we are becoming increasingly accustomed to severe weather related crop production shocks. It is the weather from now through to harvest which will dictate the crop size this year.