China contributed to world cereal stocks increase — FAO

FAO's forecast for world cereal stocks at the close of seasons ending in 2019 now stands at 772 million tons, up nearly 37 million tons from the previous report in May, but still 44.5 million tons (5.4 percent) below their opening levels.

At this level, the ratio of global cereal carryovers at the end of the 2018/19 season to trend utilization in 2019/20 would stand at 28.5 percent, down slightly from the 2017/18 season but still a relatively high ratio.

The large revision since the previous report issued in May mainly reflects upward adjustments to the estimates of China’s maize inventories, subsequent to some lowering of the country’s industrial use of maize in earlier years.

"The cumulative effect of these adjustments was an increase of almost 63 million tons in the size of maize stocks of China in 2018/19, which now stand at 122 million tons. Despite this, the revised forecast still points to a notable (24 million tons) year-on-year decrease in maize stocks held in China, reflecting the anticipated drop in the country’s maize production this year and rising domestic demand," the report writes.

Globally, total stocks of coarse grains are projected to decline for the first time in five-years to 315 million tons, resulting in the world stock-to-use ratio dropping from 26.4 percent in 2017/18 to 22 percent in 2018/19.

Global wheat stocks for crop years ending in 2019 are currently pegged at a record 283 million tons, almost 6 million tons larger than their already high opening level. The new forecast is also 4.4 million tons above the May forecast, and this is mostly on account of larger ending stocks expected in Argentina, the EU and India.

Previously it was reported that the price spread for fodder and milling wheat over 2 seasons made about USD 20 per ton.