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IGC forecasts lower world wheat output in 2018-19

IGC forecasts lower world wheat output in 2018-19

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01.25.2019
By Jay Sjerven






LONDON, ENGLAND — With no one home at the U.S. Department of Agriculture to provide updates to U.S. and world wheat supply-and-demand forecasts because of the partial shutdown of the federal government, this month’s Grain Market Report issued Jan. 24 by the International Grains Council was more highly anticipated than usual. It comprised the “only game in town” for those seeking to trade official world estimates and forecasts instead of relying on private projections or flying blind. That said, the effect of the shutdown extended to the IGC forecasts as the USDA was not able to provide U.S. numbers for January to inform the revised IGC projections, especially when it came to the body’s initial forecasts for 2019-20 world wheat harvested area and production.
In all previous years, the IGC in January was able to draw on the USDA’s annual Winter Wheat and Canola Seedings report to prepare its initial world harvested area and production projections for the upcoming year. Until the shutdown ends, the USDA will not be able to complete and issue its Winter Wheat and Canola Seedings report for 2019, which originally was to have been released on Jan. 12.

The IGC forecast world wheat production in 2018-19 at 737 million tonnes, up 8 million tonnes from its November projection (the IGC issues no monthly report in December) but down 30 million tonnes from a record 767 million tonnes in 2017-18. While higher than the previous forecast, world wheat production, the IGC noted, still was expected to drop for the first time in six years.
The IGC forecast world wheat consumption in 2018-19 at a record 745 million tonnes, up 6 million tonnes from November and up 4 million tonnes from 741 million tonnes, the current record. World trade in wheat was forecast at 170 million tonnes, down 1 million tonnes from November and down 5 million tonnes from 2017-18.
World wheat ending stocks for 2018-19 were forecast at 263 million tonnes, up 1 million from the November projection but down 7 million tonnes, or 3%, from 270 million tonnes in 2017-18.
The IGC also issued its initial preliminary world wheat production projection for 2019-20 in its Jan. 24 report. The IGC stated, “The Council’s preliminary projections for wheat supply and demand in 2019-20 point to a 13-million-tonne, or 2%, year-over-year rise in production to 751 million tonnes. However, the increase in supply is seen being completely absorbed by smaller opening stocks (-7 million tonnes year over year) and assumed growth in consumption (+6 million tonnes), potentially leaving the carryover at the end of 2019-20 unchanged year over year.”

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