MercoPress. South Atlantic News Agency

World cereal production remains strong; summer 2017 crops in South America expected to expand

The Russian Federation's wheat output is now anticipated to set a new record, while favorable weather is also boosting yield prospects in Kazakhstan

World cereal production for 2016 should amount to 2 571 million tonnes, up marginally from FAO's October forecast and 1.5% above the 2015 output. The updated figure, released Monday in the Cereal and Supply Demand Brief, reflects a substantial upgrade of the outlook for world wheat production, which is now expected to rise to 746.7 million tonnes, a 4.3 million increase from FAO's October forecast.

 The Russian Federation's wheat output is now anticipated to set a new record, while favourable weather is also boosting yield prospects in Kazakhstan. The increase in world wheat and barley production more than offsets the expected 4.8 million tonne decline in the 2016 global maize crop due to weather-induced yield downgrades for Brazil, China, the European Union and the United States of America. The forecast for global rice production was largely unchanged.

Early signs from the planting of the 2017 winter wheat crop in the northern hemisphere indicate that U.S. farmers are reducing the area because of low price prospects and a subdued export outlook due to a stronger U.S. dollar. However, wheat plantings in the Russian Federation and Ukraine are ahead of last year's pace.

Meanwhile, sowing of summer 2017 cereal crops is underway in southern hemisphere countries, and conducive weather conditions are leading to expansion in South America. The maize area planted in Argentina is expected to expand by 6% from last year's high level.

Total cereal utilization for the 2016/17 season is now forecast at 2 562 million tonnes, up slightly from October and 1.7% higher than a year earlier.

A primary driver of increased utilization of cereals is global feed use, which is likely to expand by 2.7%. The use of wheat for animal feed, buoyed by ample supplies of lower-quality wheat, is anticipated to grow by 6.1% to 146.6 million tonnes, an all-time high.

Global food consumption of cereals is forecast at 1 106 million tonnes, up 1.3% from a year earlier and sufficient to maintain a broadly stable per capita consumption level globally.

World cereal stocks will likely increase to nearly 662 million tonnes by the end of the 2017 seasons, driven by growing wheat inventories, especially in China, the U.S. and Russia.

Coarse grains stocks are projected to drop by 1.7%, led by reductions in China, Brazil and South Africa. World rice inventories are expected to fall slightly to 169.8 million tonnes.