For the second year in a row, the world will consume more grain than it produces.
Growers can expect further extreme price volatility in this early harvest period while there is no real clarity about yields and quality, say traders.
Lower crop yields in Black Sea countries and the EU are the main reason behind a drop of 16m tonnes in the International Grains Council (IGC)’s latest world wheat production estimate.
The IGC’s grain market report published on Thursday (26 July) put world wheat output at 721m tonnes compared with the 758m tonnes produced last year.
Significantly, the council also cautioned that with disappointing results being reported from ongoing harvests, there is the potential for further downgrades in future market reports.
Wheat accounts for about 35% of world grain production, with maize representing just over half of global grain volume and the remainder made up mainly by rice, followed by other less significant grains.
Latest ex-farm prices
August ex-farm wheat prices have risen by an average of about £8/t in the past 10 days, averaging £171.60/t on Friday (27 July). The full spec breadmaking premium stood at just over £12/t.
November feed wheat futures reached £187/t midweek and stood at £182.75/t at the time of writing.
Feed barley prices have gained even more than wheat, rising £12.50 in the 10 days to 27 July to average £154/t ex-farm for August.
World grain stats latest
- World grain production forecast at a three-year low – 2.059bn tonnes
- Carryover stocks (all grain) for end of current season (end of June 2019) forecast at 532m tonnes – a five-year low
- World grain consumption (2.128bn tonnes) estimated 69m tonnes higher than production
- World wheat production forecast to fall by 37m tonnes to 721m tonnes – also a five-year low