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Ukrainian Grain & Oilseed Market

Ukrainian Grain&Oilseed Market

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Cereal stocks set to decline in 2024/25 due to anticipated reductions in wheat and maize inventories

08.02.2025 18:20 "Agro Perspectiva" (Kyiv) — The latest forecast for global cereal production in 2024 has been marginally scaled back from the previous month and remains at just under 2 841 million tonnes, 0.6 percent lower year on year. The latest downward revision is primarily due to a significant reduction in the United States of America maize estimate, where late-season moisture stress curbed yields below earlier expectations. Partially offsetting this decline, production estimates for China (mainland) and the European Union were revised upward. Global barley and wheat forecasts were also trimmed marginally, based on latest data from Australia and the European Union showing smaller harvests than previously foreseen. As for rice, official production assessments released since December reported somewhat higher rice production outcomes in China, Mali, Nepal, and Viet Nam compared to previous FAO expectations, which offset slight output downgrades namely for the Philippines and Senegal. As a result, global rice production is now seen reaching an all-time high of 539.4 million tonnes (milled basis) in 2024/25, up 0.6 million tonnes from December expectations and 0.9 percent more than in 2023/24.

Turning to the 2025 crops, the main planting period for winter wheat in northern hemisphere countries came to an end in January. In the European Union, early indications point to an increase in sowings, largely for soft wheat, with most of the expansion originating in France and Germany. Weather conditions have generally been favorable in preceding months, and although drier-than-average conditions are expected in February, wheat yields are anticipated to improve in 2025 following last year’s lows, further strengthening prospects for a production recovery. In the United Kingdom of Great Britain and Northern Ireland, the winter wheat area is expected to rebound after difficult planting conditions limited the cultivated area last year. In the Russian Federation, less-than-favorable weather has contributed to a reduction in plantings, and combined with unseasonably warm temperatures in early 2025, which have thinned snow cover and increased the risk of winterkill, production may decline slightly. In India, remunerative prices and continued favorable weather conditions are supporting an overall positive production outlook for the 2025 wheat crop.

In the main coarse grain-producing southern hemisphere countries, the 2025 crop is expected to be harvested from the second quarter of the year. In Argentina, maize area is projected to decline year-on-year, reflecting farmers’ concerns about the impact of stunt disease transmitted by leafhoppers, which affected production in 2024. However, with expectations of beneficial weather over the next two months, yield prospects remain generally favorable. In Brazil, firmer maize prices could encourage a slight increase in total plantings compared to preliminary expectations, while yields are expected to improve year on year. However, some concerns remain over the delayed sowing of the soybean crop, which could, in turn, delay the planting of the main safrinha maize crop. In South Africa, record-high maize prices triggered an increase in maize plantings. Weather conditions have improved following uneven rainfall in the last quarter of 2024, and yield prospects remain at average to above-average levels.

World cereal utilization in 2024/25 is forecast to rise by 0.9 percent (24.5 million tonnes) above the 2023/24 level, reaching 2 869 million tonnes, up 9.8 million tonnes since the December report. Accounting for the bulk of the increase, an 8.4 million tonne upward revision in the 2024/25 coarse grain utilization, mostly due to higher foreseen use of maize, especially for feed, brings the forecast to 1 535 million tonnes, 1.0 percent (14.7 million tonnes) above its 2023/24 level. By contrast, at 797.2 million tonnes, the global wheat utilization forecast for 2024/25 is up only marginally (0.8 million tonnes) since the December report and remains near last season’s level with an anticipated increase in food consumption offsetting a decline in feed use of wheat this season. World rice utilization is forecast to expand by 1.9 percent in 2024/25 to reach a fresh peak of 537.2 million tonnes. This forecast stands some 500 000 tonnes above December expectations, reflecting upward revisions to use expectations for a host of African countries, which more than compensated for a less buoyant domestic use outlook namely for India.

FAO’s latest forecast for world cereal stocks by the close of seasons in 2025 has been revised downwards by 7.8 million tonnes, now pointing to a 2.2 percent decline (19.3 million tonnes) below opening levels to 866.6 million tonnes. Despite the expected decline in stocks, the global cereal stocks-to-use ratio in 2024/25 is anticipated to remain at a comfortable level of 29.8 percent, albeit down from the 2023/24 level of 30.9 percent. Total coarse grain stocks have been lowered by 6.1 million tonnes since the previous forecast to 354.2 million tonnes, pointing to a 3.8 percent (14.1 million tonnes) decline from opening levels. The revision largely rests on a sharp cut (10.1 million tonnes, 20.5 percent) in the United States of America’s maize stocks as a result of lower production and higher export prospects since the previous report. Global wheat inventories were also lowered this month, by 1.3 million tonnes, to 308.4 million tonnes, representing a decline of 2.9 percent below opening levels. The revision is underpinned by a 3-million-tonne reduction in China’s wheat stocks on account of their lower anticipated wheat imports. FAO’s forecast of world rice stocks at the close of 2024/25 marketing years has been trimmed by 500 000 tonnes since December. Nevertheless, it continues to point to world rice stockpiles expanding by 2.0 percent to a historical high of 204.0 million tonnes, on the back of expected stock rebuilding among rice importing countries, as a group, and a still ample aggregate level of reserves in rice exporting countries.

Remaining nearly unchanged since the previous forecast at 483.5 million tonnes, world trade in cereals in 2024/25 is headed for a contraction of 5.6 percent (28.7 million tonnes) from the 2023/24 level. Global coarse grains trade in 2024/25 (July/June) stands at 227.7 million tonnes, down 6.8 percent (16.5 million tonnes) from its 2023/24 level. Weaker demand from China for barley and maize drove downward revisions in both global trade of barley (down 2.1 million tonnes m/m) and maize (down 0.7 million tonnes m/m). Lower forecasts of barley exports from Australia and the European Union, and of maize exports from Brazil, India and the Russian Federation also contributed to the weaker trade prospects. FAO’s wheat trade forecast for 2024/25 (July/June) has also been revised downwards since December, by 1.5 million tonnes, to 196.7 million tonnes. China’s import forecast has been lowered to its lowest level of wheat imports since 2019/20, reflecting slower-than-previously anticipated import pace to date and expectations of reduced domestic demand for feed use of wheat. Export sales were lowered for the European Union, on account of tighter supplies, and the Russian Federation due to slowing export pace as well as an export quota (of 10.6 million tonnes) for the period from mid-February to the end of June, the country’s lowest wheat export quota in five years. International trade in rice in 2025 (January-December) is now seen reaching 59.1 million tonnes, up from a revised estimate of 58.4 million tonnes for 2024 and 3.5 million tonnes more than reported in December. India remains forecast to drive the export expansion of 2025, although Brazil, Myanmar and Uruguay are also expected to step-up shipments over the course of the year.

Source: FAO

Agro Perspectiva

< FAO Food Price index declined in January 2025, mostly due to lower sugar, vegetable oil and meat prices

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