Crop Insurance Today Second Quarter 2020 - 10

Fig. 5

World Grains & Oilseeds Production and Consumption
U.S. & World Stocks/Use %

3000000

35%
30%

2500000

25%

1000 MTs.

2000000

20%
1500000
15%
1000000

10%

500000

5%

0
20

19
19

/2
0

18

/2
0

18
20

20

17
17

/2
0

16

/2
0

16
20

20

15
15

/2
0

14

/2
0

14
20

20

13
13

/2
0

12

/2
0

12
20

20

11
11

/2
0

10

/2
0

10
20

20

09
09

/2
0

08

/2
0

08
20

20

07
07

/2
0

06

/2
0

06
20

20

05
05

/2
0

04

/2
0

04
20

20

03
03

/2
0

02

/2
0

02
20

20

/2
0

01
20

20

00

/2
0

01

0%

Crop Year
	

US Stocks to Use	

World Stocks to Use	

World Production	

World Consumption

Source: https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery

balance for the third year in a row.3 In 2019,
world consumption exceeded production by
enough to draw down the global stocks-to-use
ratio by one percent from the previous year (Figure 5). The global stocks-to-use ratio decline is
attributable to reductions in individual country
supply/demand balances. Among all oilseeds,
only sunflower seeds registered an increase in
ending stocks. But most importantly, declines in
U.S. soybean stocks overwhelmed the category,
declining from 24.7 million metric tons to 11.6
million metric tons. Notable among the grains
were stock reductions in China and the United
States, down 11 million and nine million metric
tons, respectively. In the United States the drawdown of soybean stocks and reduction in ending
grain stocks reduced the stocks-to-use ratio to 21
percent, down six percent from the previous year.
WHEAT
Wheat accounts for 34 percent of global grains
production. Variations in production among major wheat producing countries had counter-balancing effects resulting in global production increasing somewhat in 2019, at 765 million metric
tons, up almost five percent from 731 million
metric tons in 2018. Increased production in Argentina and India helped offset decreasing production in Australia and Turkey. Australia had a
particularly bad year with production down for
the third straight year, dropping 12 percent to
3

15.2 million metric tons, the lowest level since the
drought-plagued 2007/08 season when production fell to 13.2 million metric tons. Global feed
use rebounded from the previous year reaching
148 million metric tons, up six percent and equal
to the level of 2016/17. Total world consumption
increased almost 2.5 percent from 2018 reaching
752 million metric tons.
World ending wheat stock levels increased
by four percent in 2019, reaching 287 million
metric tons. However, any discussion of ending
grain stocks must be separated into two buckets
- stocks held in China and those in the rest of the
world. For example, China accounted for roughly
52 percent of global wheat ending stocks in 2019
and accounted for the bulk of global ending stock
increases from the previous year, about 89 percent. Importantly, China wheat stocks are seldom
at play in world markets. Ending wheat stocks in
2019, excluding China, remain relatively stable,
up 1.08 metric tons to approximately 139 million
metric tons, just under one percent above the
previous year.
In the United States, all wheat production in
2019 increased by almost two percent from the
previous year. Stocks-to-use in the United States
continue to be at burdensome levels. All wheat
stocks to total use, including exports, are down
somewhat from the previous year at 43 percent,
from 50 percent in 2018. By class, hard red win-

ter wheat stocks declined by 14 percent in 2019
from the previous year as domestic use and exports increased, but overall stocks remain large
at 56 percent of use. Declining production in all
other classes of wheat helped bring down stock
levels. Hard red spring stocks-to-use declined
three percent to 42 percent; soft red winter wheat
stocks-to-use declined 12 percent to 36 percent;
white wheat was down three percent to 28 percent; and durum wheat stocks fell to 16 percent
from the previous year level of 50 percent as
production declined 31 percent and exports increased 82 percent.
CORN
Globally, corn accounts for more than 51 percent of grain production. In 2019, global corn
production decreased by about one percent,
down almost 11 million metric tons. Russia,
the European Union, and South Africa had increased corn production in 2019, up 25 percent,
3.5 percent and 35 percent, respectively, from
2018. However, the increased production in these
countries was not enough to offset reduced production in the United States, Argentina, Canada,
and Mexico with production declines from 2018
of 4.5 percent, two percent, 3.6 percent, and 9.4
percent respectively.
As discussed earlier in the case of wheat, it is
important to focus on the role of China in the
global corn market, relative to other countries.
China is both an important corn producer, accounting for over 23 percent of global corn production, and world grain storehouse, holding
65 percent of global corn stocks in 2019. China
maintains an aggressive stockpiling policy for
corn, similar to wheat, with current stock levels equal to more than 71 percent of their annual total use. Current corn stocks in China have
accumulated steadily over the past 10 years and
are more than double their level from 2009. This
is important as total global stocks-to-use levels
appear robust at 26 percent, having declined for
the past three years. However, when considering
stocks held outside of China, the global stocks-touse ratio reveals a much tighter inventory balance.
Over the past three years, global corn stocks-touse has fallen from around 14 percent to just over
12 percent. With large storage supplies in China
not likely to enter global market channels, the rest
of the world appears to be facing a tightening of
available stocks, which should provide some upward price support going forward.

Major Oilseeds includes Copra, Cottonseed, Palm Kernel, Peanut, Rapeseed, Soybeans and Sunflower seeds. Grains include barley, corn, millet, mixed grains, oats, rye, sorghum and
wheat. Wheat and corn comprise 87 percent of global grains, while soybeans account for almost 60 percent of global oilseeds. Accordingly, additional detail provided for these three crops.

10

SECONDQUARTER2020


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