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FAO pegs grain carryouts at new record high

Surging US corn stocks are expected to help global cereal inventories to new record highs at the end of the 2017 season, UN’s FAO said Thursday.

US corn stocks are expected to jump 32% from their opening level to a record 64mn t, outweighing drawdowns in China and Brazil and pushing  global inventories to their second highest on record. China in particular is trying to shrink its mountains of stored corn through increased domestic offtake into industries including ethanol.  US ethanol demand expectations meanwhile are suffering as the renewable fuel sector tries to fight off a double whammy of likely trimmed ethanol consumption and deteriorating international sales prospects into China.

Global cereal stocks are on track to hit a record 681mn t at the end of the 2017 season, up 3% or 20mn t YoY after the UN body upgraded its projections by 11mn t MoM.

Brazil, Australia and Argentina have all seen their wheat production outlooks improve since December, bringing the global wheat stock projection to a new record 245mn t. This would beat last year’s estimate by 8.3% or 19mn t.

MS – 02/02/2016

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