IGC experts have lowered the forecast for world grain production in the 2024/25 season, but it is expected to exceed the previous season by 15 million tons.
2023/24 Season Estimates
In a May report, IGC experts estimated world grain production in FY 2023/24 at 2.297 billion tons, which would exceed the 2022/23 FY harvest by 1.36%. Additionally, the grain consumption forecast was increased by 2% compared to the previous season, reaching 2.311 billion tons. As a result, the estimate of final stocks was reduced by 2% to 588 million tons, with wheat stocks specifically down by 6%.
Reduced Production Forecast for 2024/25
Due to unfavorable weather conditions affecting crops in Ukraine, the Russian Federation, the USA, Argentina, and countries in North Africa, the forecast for world grain production in the 2024/25 season has been reduced by 10 million tons to 2.312 billion tons. Despite this reduction, it will still exceed the previous season’s figure by 15 million tons, as the decrease in corn production will be offset by an increase in other cereals.
Global Grain Consumption and Stocks
World grain consumption in FY 2024/25 is expected to increase by 9 million tons compared to the previous season, reaching 2.32 billion tons. Consequently, global ending stocks will decrease by 1% to a 10-year low of 580 million tons.
Wheat Production and Stocks
Compared to April estimates, the forecast for world wheat production in the 2024/25 season was reduced by 3.2 million tons to 794.5 million tons. This is still 4.1 million tons more than in the 2023/24 season. In particular, the forecast for the Russian Federation was lowered from 90.4 million tons to 85.5 million tons. World final stocks of wheat are projected to decrease by 6.1 million tons to 259.8 million tons compared to the 2023/24 season.
Record Rice Production
The forecast for global rice production in the 2024/25 season has been increased by 3 million tons to a record 523 million tons. Ending stocks are also expected to rise by 1 million tons to 171 million tons, surpassing the previous season by 9 million tons and 3 million tons, respectively.
Corn Production and Consumption
The forecast for world corn production in FY 2024/25 has been reduced by 5 million tons to 1.22 billion tons, which is 5 million tons less than in the 2023/24 FY. However, global consumption is projected to increase by 2 million tons to 1.226 billion tons, exceeding the 2023/24 season by 6 million tons. As a result, the estimate of ending stocks was reduced by 10 million tons to 281 million tons, which would be 5 million tons less than the previous season’s level.
Grain Price Indices Rise
The IGC Grains and Oilseeds Index (GOI) reached a 4-month high due to a sharp increase in wheat prices caused by difficult weather conditions in the Northern Hemisphere, including frost in the Russian Federation. The IGC GOI wheat index rose 16% to a 7-month high.
The IGC GOI Corn Index also rose 4% for the month amid supply uncertainty, although supply from Ukraine remained steady due to strong export demand.
The IGC GOI Rice Index increased by 4% as well, driven by higher prices in Thailand amid shrinking spot supplies and stronger export demand.
The IGC GOI Soybean Index saw a 9% rise, influenced by crop and logistics issues in South America.
Commentary
The IGC’s latest report highlights the volatility in global grain production and consumption. While adverse weather conditions have negatively impacted certain regions, the overall production remains robust compared to the previous season. The rise in grain prices, particularly wheat, underscores the sensitivity of global markets to climatic factors. Stakeholders should closely monitor these developments to adapt to the shifting dynamics of the global grain market.