Global Grain Stocks Climb as Animal Feed Demand Slows
Despite output from bumper harvest being slightly less than expected, the world is on pace to see global grain stocks climb by 1.9% to their highest level in 29 years as demand for animal feed cools, according to the International Grains Council (IGC)and reports from Bloomberg.
Carryover inventories of grain (not including rice) will top 455 million tons in 2015-16, representing stocks that are 1 million tons above the latest forecast, as the council cut its estimate for feed demand by 0.5% to 873 million tons, noting “Owing to abundant supplies, there will likely be a further accumulation of end-season stocks.”
The council cut its estimate for total grain demand by 0.4% and has cut its prediction for global corn production by 0.8% to 959.5 million tons. South Africa is expected to see the biggest cut to output of 35% to 7.5 million tons due to that country’s ongoing drought, which is the worst in more than a century.
Global wheat inventories for 2016-2017 are expected to be near record levels, as the council has increased its wheat harvest estimate by 0.6% to 730.8 million tons on the back of higher output in China, Afghanistan, and Canada.
“While conditions for 2016-17 winter wheat have not been entirely ideal in some regions, global harvest prospects remain mostly favorable,” reports the IGC.