The International Grains Council became the latest commentator to slash forecasts for Europe’s corn harvest as it warned that world grain stocks would shrink to an even smaller eight-year low than previously expected.
The intergovernmental group cut by 6m tonnes to 577m tonnes its forecast for world grain stocks at the close of 2022-23, a figure which would be the lowest since 2014-15.
“Including drawdowns for maize [corn], wheat, barley and sorghum, cumulative closing stocks are projected to drop by 4%, to an eight-year low of 577m tonnes,” the IGC said.
The revision expanded to 25m tonnes the dip in world grain stocks forecast for 2022-23.
Stocks held by major exporters, which are particularly important in determining prices on international markets, were seen dwindling by 9m tonnes to 134m tonnes, compared with a forecast last month of a 6m-tonne decline.
Deteriorating EU corn
The downgrade reflected in the main cuts to expectations for corn supplies, as the council slashed its forecast for 2022-23 global output of the grain by 10.0m tonnes, to 1.179bn tonnes.
The reduction to the world corn harvest estimate was in turn down largely to a slice of 8.7m tonnes, to 59.6m tonnes, in the forecast for the European Union crop, which has been tested by persistent dryness and heat in many leading producing countries.
The US Department of Agriculture last week – reporting that “searing heat and widespread drought during pollination and tasselling has significantly diminished the EU’s corn crop” – cut its estimate for the harvest by 8.0m tonnes to 60.0m tonnes.
Strategie Grains slashed its forecast by 10.0m tonnes, to 55.4m tonnes, a 15-year low.
The reduced EU corn harvest will mean “greater maize import needs”, the IGC said, lifting by 2.3m tonnes to 19.0m tonnes its forecast for the bloc’s buy-ins in 2022-23.
That promoted the bloc to level with China in first place in the corn-importing league.
‘Minimal days with heat stress’
The IGC also lowered its forecast for the US corn harvest, by 3.7m tonnes to 364.7m tonnes, a figure in line with the USDA’s own figure.
However, the Ukraine crop was upgraded by 2.6m tonnes to 27.7m tonnes, if staying well behind the 42.1m tonnes estimated as harvested in 2021.
The USDA noted “favourable rainfall and minimal days with heat stress in the key corn-growing regions” in Ukraine.
‘Larger Russian crop forecasts’
For wheat, the IGC raised its forecast for world output, by 7.8m tonnes to 778.0m tonnes, in a large part down to an enhanced expectation for China, as well as for many major exporting countries, Including Russia.
The Russian wheat harvest was pegged at a record 87.6m tonnes, up by 2.4m tonnes from last month’s estimate, while the Canadian crop was lifted by 600,000 tonnes to 33.0m tonnes.
“Larger Russian crop forecasts and northern hemisphere seasonal pressure” had contributed to a fall of 5.5% over the last month in wheat prices, as measured by the IGC’s wheat sub-index.
“The opening of the Black Sea safe shipping corridor, albeit with limited wheat exports to date,” had also spurred selling.
World wheat stocks were, nonetheless, forecast shrinking by 5m tonnes to 275m tonnes over 2022-23 – if a drawdown less than the 10m-tonne estimate published last month.