Record global grain production forecast for 2023-2024 amid market tensions and weather issues

The 2023-2024 cereal production is predicted to set new records, says the International Grain Council (IGC).

Corn and rice yield are projected to grow, with the total cereal output, excluding rice, pegged at 2.3 billion tons, slightly higher than the 2021-2022 season.

Corn production is expected to rise by 5.5% YoY to 1.22 billion tons, primarily due to increased cultivation in the U.S. and a bountiful crop prediction in Brazil.

Global corn production, one of the most consumed cereals, is projected at 527 million tons, up by 2.5% from the previous season.

However, wheat production is expected to decrease by 2.4% YoY to 784 million tons, following remarkable yields in Russia and Australia during the last season.

Furthermore, wheat consumption is forecasted to surpass production by 20 million tons, increasing market tensions.

Corn demand is also rising, with a predicted annual consumption surge of 30 million tons, expected to be met by the increased production.

The heightened corn consumption, mainly for livestock feed, can be attributed to Asia’s economic recovery and subsequent increase in meat consumption.

Stock volumes exacerbate the market tension for wheat.

As per the U.S. Department of Agriculture’s (USDA) latest report, Wheat reserves at the major exporting nations sit at approximately 55 million tons, marking a ten-year low.

The report indicates minimal progress in wheat production over the last three years.

Concerns for the cereal market include weather fluctuations, geopolitical risks such as unrest in Ukraine, and the El Niño weather phenomenon’s influence in Asia.

However, North American drought risks have lessened.

Despite initial concerns about El Niño in Asia, no significant impact on rice has been observed.

India has placed restrictions on non-basmati white rice exports to secure its supply and control domestic market price surges.

Notwithstanding this, rice stock levels remain ample, accounting for 37% of annual consumption, significantly higher than during the 2008 crisis.