Miller Magazine Issue 107 / November 2018

94 MILLER / NOVEMBER 2018 MARKET ANALYSIS China. Global inventories are still seen posting a second consecutive y/y (year-on-year) decline (-57m t), with the drop concentrated in the major exporters (-37m). The figure for grains trade is unchanged m/m, as cuts for wheat, barley and sorghum are balanced by an increase for maize. The Council forecasts an expansion in world wheat area for the 2019/20 harvest, the first gain in four years, but more rain is needed for planting and crop establish- ment in some major producing areas, especially in parts of the EU, Russia and Ukraine. Given current conditions, sizeable declines in rapeseed area are likely in the EU. The Council’s outlook for global soybean output in 2018/19 is broadly unchanged from September, at a peak of 369m t, the 9% y/ y increase stemming from acreage gains and improved yields in major producers. Due to a higher carry-in, supplies are raised by about 2m t m/m and, with total use cut fractionally, world endseason inventories are lifted by 2m, to 54m, a near- 30% y/y expansion, mostly in the US. The prediction for trade is maintained at 155m t, a marginal y/y rise and a new peak. Prospects for rice trade in 2018 are little changed m/m, at a high of 48m t, with volumes underpinned by firm demand from buyers in Far East Asia. At 490m t, the 2018/19 production outlook is pegged fractionally lower than before and matches the previous season’s outcome. The Council’s projection for world trade in 2019 is ma- intained at a record of 49m t, up by 1% y/y on potenti- ally firmer demand from Near East Asia and sub-Saharan Africa. The IGC Grains and Oilseeds Index (GOI) was virtually unchanged m/m, with increases for wheat and soybeans offset by falls in the other components. World total grains (wheat and coarse grains) produc- tion is expected to decline by 1% in 2018/19, to a th- ree-year low of 2,081m t. A better maize harvest (+26m t y/y) is seen being outweighed by falls for other crops, especially wheat (-38m) and barley (-6m). Despite this month’s relatively large China-related adjustments, the outlook for global grains supply and demand in 2018/19 is similar to the last GMR. Ove- rall availabilities are seen contracting by about 1% y/y, while demand growth is expected to be sustained, inc- luding for food, feed and industrial uses. World carr- yover stocks are expected to shrink to a four-season low, with the ratio of stocks-to-use the tightest sin- ce 2013/14. The biggest projected fall in inventories is for maize (-38m t) and includes reductions for both the major exporters (-9m) and China (-24m). In cont- rast, the drop for wheat (-11m t) is concentrated in the