IGC expects highest global grain ending stocks in 2015/16

The International Grains Council (IGC) published its latest grain supply and demand forecasts yesterday. It has raised its forecasts by 9 million tons and now predicts global grain stocks of 456 million tons by the end of the 2015/16 crop year, which would constitute the highest figure in 29 years, notes Commerzbank. 

The upward revision for the current crop year is chiefly the result of an increase in anticipated global wheat production. According to the IGC, it looks set to grow by 7 million to a record high of 727 million tons as compared to its last estimate in August. This means that wheat production this year could likewise exceed the year-on-year figure by a good 7 million tons. 

The main reason for the increase in the global production estimate is the wheat crop in the EU. According to the IGC, it is likely to grow to 155.5 million tons and would therefore fall only marginally short of last year's crop of 156.2 million tons. The crop forecast for China was also adjusted upwards by 1.5 million to 129 million tons. Russia is likewise set to produce 1 million tons more wheat, production totalling 60 million tons by year's end. 

EU wheat traded in Paris fell by 1.1% in price yesterday in response to the report and closed at €173 per ton. The US wheat price also fell sharply and closed trading 2% down at 497 US cents per bushel.