Record crops to send grain stocks to all-time peak, IGC says

London | Reuters –– Global grain stocks are expected to surpass 500 million tonnes for the first time at the end of the 2016-17 season, the International Grains Council said on Thursday, raising its forecasts for both corn and wheat production.

The intergovernmental body, in a monthly update, put total grain carryover stocks at the end of the season at 504 million tonnes, up from a previous projection of 498 million and the prior season’s 475 million.

“Wheat and maize account for nearly all the expected stocks expansion,” the IGC said, noting stocks were set to rise despite a strong increase in consumption.

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Agribusiness bank Rabobank said this week record-high stocks should keep world food prices low during 2017 even as inflation starts to rise in many developed economies.

The IGC raised its forecast for the 2016-17 world corn (maize) crop by seven million tonnes to a record 1.042 billion tonnes, mainly reflecting improved prospects in the United States and Brazil.

The move followed the U.S. Department of Agriculture’s upward revision to an already record U.S. corn harvest earlier this month.

World wheat production in 2016-17 was seen at a record 749 million tonnes, up one million tonnes from its previous forecast and well above the prior season’s 737 million.

The IGC said world wheat harvested area for the 2017-18 season was projected to be almost unchanged with reductions in the U.S. and Kazakhstan balanced by increases in Russia and North Africa.

“Conditions for recently sown 2017-18 winter wheat in the northern hemisphere are mostly favourable,” the IGC said.

The IGC also raised its forecast for 2016-17 global soybean production by four million tonnes to a record 336 million tonnes.

“With harvesting complete, U.S. output could increase by 11 per cent year-on-year, while planting in Brazil is well advanced in key growing areas, notably Mato Grosso,” the IGC said.

World rice production in 2016-17 was also seen at an all-time high, rising to 485 million tonnes, up from a previous forecast of 484 million and the prior season’s 472 million.

“With many Asian producers likely to cut better crops against the backdrop of improved growing conditions, world rice output in 2016-17 is projected to expand,” the report said.

Nigel Hunt is a Reuters correspondent covering agriculture from London.

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