With grain markets in a state of instability, even minor events around the world are influencing sentiment, which ultimately influences grain price.

Therefore, it’s important for Irish growers to stay updated on global production, consumption and carryover stock projections for the 2020/2021 marketing season.

The International Grains Council (IGC) is one important source of this global information.

Late last week, the IGC lowered production estimates in the 2020/21 marketing year by 5m tonnes, as wheat plantings suffered from dry weather in the EU and the Black Sea.

However, this cut in wheat is more than offset by a larger maize harvest projection.

At 2,218mt, the total global grains production in 2020/21 is projected to rise by 43mt when compared to 2019, with the biggest increase for maize (+39mt).

Further downgraded estimates for South American producers lowers the 2019/20 global soyabean output forecast by 3mt, to 338m, down by 24mt.

International Grain Council grain forecast.

Consumption

As expected, disruptions caused by the COVID-19 pandemic have negatively impacted grain demand, particularly for industrial processing, and grain consumption is expected to be only modestly higher compared to last season.

This disruption is being felt in the 2019/2020 marketing year in particular and is negatively impacting forward prices for the 2020/2021 marketing year.

However, there is perhaps a glimmer of hope, at least according to the IGC.

Disruptions caused by the COVID-19 pandemic have negatively impacted grain demand, particularly for industrial processing

Consumption for the 2020/2021 marketing year is forecast to show a strong gain, rising to a new all-time high of 2,222mt (+41mt), including increases for food (+10mt), feed (+14mt) and industrial uses (+17mt).

The IGC expect trade to reach a new peak, including record volumes of wheat and maize. This is obviously dependant on the economic outcome of COVID-19.

Ending stocks

However, only a relatively small fall in carryover stocks is anticipated next season, as a drawdown of maize inventories is partly balanced by build-up of wheat and barley.

With that said, increased demand, coupled with projections of reduced carryover stocks, could be the fuel that markets need during the next marketing year to generate support, as it is likely to be a challenging one.