UN’s FAO revises corn estimates up by 1.1%, soy down on weather

The United Nation’s Food and Agriculture Organization (FAO) has revised upwards its estimate of global corn production to 1.075 billion mt, up 12 million mt on previous forecast as it expects the US to produce an additional 7.5 million mt.

With a 5 million mt revision upwards in expectations for global demand next year, the UN now expects global stocks of corn to hit 245 million mt, a record high and 40 million mt more than forecasts by the International Grains Council.

“Stocks (ending in 2018) scaled up mostly on larger inventory build-ups in several countries, especially in the US where ending stocks could climb to a new record,” according to the report, the AMIS Market Monitor.

The UN is generally the first of three not-for-profit organisations to release global forecast data each month, the other two being the influential WASDE report by the USDA and the International Grain Council.

Its figures on corn suggest that stocks to use ratio is around three months, however, it is set against a backdrop of confusion over what level of inventory China holds with most analysts guessing upwards of 200 million mt is held by China alone.

In terms of wheat, FAO said globally favourable conditions were present, with the exception of Australia where dryness has hampered growth.

Nevertheless, FAO revised upwards its estimate for wheat production, albeit by to 754.9 million mt up 2 million mt on its previous estimate, but down 7 million mt on the previous year.

Trade will fall by 2 million mt year on year to 175 million mt due to lower import demand in China and India.

Soybeans

Meanwhile soybean estimates were nudged down to 345.9 million mt from 346.3 million mt last month, largely due to weather conditions in Argentina.

That figure remains 3 million mt below last year’s bumper harvest, mainly because of good growing season in Brazil.

“In Brazil, sowing wraps up under favourable conditions owing to the return of rains. An increase in area is expected for this season. In Argentina, sowing of spring-planted crop continues under mixed conditions due to low soil moisture in the north,” the report said.

Consumption is estimated at 350.8 million mt, 2 million mt higher than last month’s forecast, but 10 million mt up on 2016 consumption, largely on Chinese demand increases.

Ending stocks are estimated to reach 46 million mt, down from 51.1 million mt last year.