World wheat harvest to dip in 2017-18 - but not by much, says IGC

20.01.2017

World wheat production will fall next season – but not by much, the International Grains Council said, with global area to see only a "marginal" drop despite the slump in US winter sowings to the lowest in 108 years.

The IGC, in its first estimate for the 2017-18 global wheat harvest, pegged production at 735m tonnes.

While a drop of 17m tonnes from this season's all-time high, a harvest at that level would still be the third biggest on record, and leave little potential for an erosion of inventories, seen entering next season at a record 225m tonnes.

"With the supply and demand outlook finely balanced, only a small contraction in end-season stocks is expected [in 2017-18]," the council said.

'Broadly favourable'

The forecast reflected in part largely benign conditions for northern hemisphere winter wheat, which accounts for the majority of world production.

"Prospects for 2017-18 winter wheat remain broadly favourable across the northern hemisphere, with concerns about dry and occasionally chilly weather mainly confined to parts of the US and Europe," the IGC said.

Separately on Thursday, respected analysis group Strategie Grains, citing losses to winterkill, cut its estimate for this year's European Union soft wheat harvest to 1.2m tonnes to 144.8m tonnes, but that result would still be nearly 8m tonnes larger the rain-hurt 2016 crop.

US vs India

The IGC also forecast that global wheat area this year would, on a harvested basis, see only a "marginal" decline, despite the plunge in US winter wheat sowings to their lowest since 1909, as revealed by the US Department of Agriculture last week.

Indeed, the council, noting strong Indian plantings, said that it had made little change to its estimates, despite the USDA plantings figure, which came in well below market expectations.

"While US plantings declined sharply, sown acreage in India surpassed expectations, leaving the total harvested area projection mostly unchanged from before and similar to last year," the council said, seeing output reduced instead by a return to "closer-to-average" yields, from the bumper levels of 2016-17.

Indian farmers have been incentivised to sow wheat by elevated domestic prices, lifted by a poor harvest last year which has returned the country to being a net importer of the grain.

'Easily the largest on record'

The IGC also on Thursday raised by 10m tonnes to 2.094bn tonnes, "easily the largest crop on record", its estimate for world production of coarse grains and wheat in 2016-17,

"Apart from barley, solid [production] growth is expected for most grains, but with a particularly sharp increase in maize output," the council said, lifting its forecast for the global corn harvest by 3m tonnes to 1.045bn tonnes, a rise of 77m tonnes year on year.

The estimate for world consumption was also upgraded, by 6m tonnes to 2.06bn tonnes, but remained well below output.

"A comparatively steeper increase in supplies will lead to a fourth successive year of stock building, including records for wheat and maize [corn]."

agrimoney

Readers choice: TOP-5 articles of the month by UkrAgroConsult