IGC Trims World Soy Production Estimate

The International Grains Council has trimmed its 2019-20 global soybean production forecast, citing downgrades in both Argentina and Brazil.

In its regular monthly supply-demand update on Thursday, the IGC lowered its world soybean estimate by 4 million tonnes from February to 341 million, now down 5% from a year earlier. The IGC partially offset this month’s lower soy production estimate by trimming expected consumption by 2 million tonnes to 358 million, although projected 2019-20 ending stocks still fell 1 million tonnes to 38 million – now a hefty 17 million below the previous year.

The IGC’s downgrade for the two South American countries is surprising, given that earlier this month the USDA raised its estimates of the 2019-20 Argentine and Brazilian crops by 1 million tonnes each to 54 million and 126 million tonnes, respectively.

In other changes this month, the IGC raised its estimate of 2019-20 world corn production to 1.157 billion tonnes from 1.116 billion, mainly due to an upward revision in the EU crop. With that increase – and a reduction in expected consumption – 2019-20 world corn ending stocks are now seen at 289 million tonnes, up 5 million from last month but still well down from 323 million a year earlier.

With estimated 2019-20 world wheat production unchanged from February at 763 million tonnes, the forecast for global total grains production (wheat and coarse grains) is 2.175 billion tonnes this month, up 3 million from February. Ending stocks are up 4 million tonnes from February to 608 million but still down 17 million from the previous year at a four-year low.

In its accompanying commentary, the IGC noted “escalating concerns about the global spread of the coronavirus and increasing uncertainty about the longer-term implications for production and consumption.”

While some commodities have seen a sharp upturn in nearby demand, especially for rice and wheat-based foods, weakening economic conditions could dampen usage in the longer term, it said, particularly for industrial products such as corn-based ethanol and starch.

“Although import buying of some commodities has accelerated in recent weeks, logistical challenges are being reported as movement constraints and quarantine measures become widespread,” the IGC added.