IGC trims global corn outlook, stocks-to-use ratio to hit 3-yr low

The International Grains Council has trimmed its corn production forecast for 2017/18 to 1.048 billion mt from 1.054 billion mt in its January update on poor harvest prospects in Argentina, Brazil and South Africa.

In the update released Thursday, global corn stocks were revised down by 8 million mt to 314 million mt, after a steep monthly increase of 116 million mt in January update, while it sees global consumption flat at 1.068 billion mt.

This in turn caused the stocks-to-use ratio to drop below the psychological level of 30% for 2017/18.

This barrier was last broken in the 2014/15 marketing year.

The IGC, however, expects South American corn yields to improve for 2018/19 which would increase global corn production, but it expects acreage to remain unchanged.

The cut in corn production numbers was the main reason why IGC’s total grains numbers were revised down.

IGC, however, left its forecast of the global wheat balance sheet fairly unchanged compared to last month’s rapport, with only consumption down 1 million mt to 743 million mt.

The IGC expects for the next campaign to see a “reductions in both area and average yields may see the global wheat harvest recede, and stocks are predicted to come down for the first time since 2012/13”.

Soybean production was also revised downwards by 2 million mt month-on-month, to 347 million mt, due to adverse weather conditions in Argentina.

However, the IGC reduced its global soybean consumption estimate down by 3 million mt, which caused a rise in end of stocks to 44 million mt, up from 40 million mt.  

“The world [soybean] harvested area is tentatively projected at a new high in 2018/19, including gains in Brazil and the USA,” IGC noted.