LONDON, ENGLAND — Global wheat stocks continue to tighten as the International Grains Council (IGC) released its latest Grain Market Review report on Nov. 18 that showed production falling by 4 million tonnes and carryover stocks declining by 2 million tonnes since last month’s estimates.

The IGC said the wheat production forecast was lowered to 777 million tonnes, mainly because of a sharp reduction in output in Iran as well as downgrades in Kazakhstan, Algeria and the European Union. Iran’s decline is due to a severe drought that sliced production to a 13-year low of 11.5 million tonnes, down 21% year on year.

“The forecast for world stocks at the end of 2021-22 is lowered to 274 million tonnes (down 4 million tonnes from the previous year), representing the first global drawdown in three seasons,” the IGC said. “The year-on-year contraction is concentrated in the major exporters, where aggregate inventories are predicted to shrink by 6.6 million tonnes to 53.4 million, the least since the end of 2012-13.”

Following below-average harvests, the United States and Canada are projected to be especially tight at 15.8 million tonnes and 3.5 million tonnes, respectively, the IGC noted.

Record wheat consumption continues to drive the drawdown in stocks. Although the IGC cut its consumption estimate by 1 million tonnes from the previous month, the projected total for 2021-22 of 782 million tonnes is 9 million tonnes above last year’s record total and 5% higher than the global wheat consumption figure two years ago (745 million tonnes).

“Despite elevated (wheat) prices, there are signs that food use is remaining resilient, and is seen climbing by 2% year on year to 541 million tonnes,” IGC said. “The feed figure is trimmed a little month on month, although 154 million tonnes (up 3% from the previous year) would still be a record.”

The forecast for world trade is raised by 1.4 million tonnes month on month, to a record 195.7 million tonnes, a 3% increase year on year.  The biggest adjustment is for Iran, with imports up by 1.8 million tonnes month on month, to 6.8 million tonnes, the most since 2008-09. 

The IGC Grains and Oilseeds Index climbed by 1% over last month, as weaker soybean and rice prices were offset by net gains for wheat, corn and barley.