Overview of world grain trade
Recently, grain markets have been affected not only by extreme weather conditions (from drought to floods), but also by geopolitical factors - the conflict in the Middle East and the war in Ukraine.
According to the UN FAO , in September the grain price index increased by 3% compared to August, but was 10.2% lower than in September 2023. After a 3-month decline, world wheat prices rose in September against the background of unfavorable weather in the main exporting countries, although growth was limited by supplies of cheap Black Sea grain. Corn prices rose due to low water levels in US and Brazilian rivers, strong exports from Argentina and strong domestic demand in Brazil.
The price index for vegetable oils in September grew by 4.6% compared to August to the highest level since the beginning of 2023. Palm oil prices rose for 4 straight months on forecasts of a seasonal cut in production, while soybean oil rose on lower-than-expected US refining output. Rapeseed and sunflower oil prices rose as a result of reduced production caused by a low harvest of oil crops in FY2024/25.
The IGC Grains and Oilseeds Price Index fell to a 4-year low in August before rising slightly. Wheat prices rose against the background of geopolitical risks and unfavorable weather in some exporting countries, and corn prices rose due to increased premiums in the Persian Gulf and speculative demand for CME. Wheat export prices are currently 10% lower than last year, which could lead to a reduction in planted area in FY 2025/26, especially given the adverse weather in the Northern Hemisphere and low production profitability.
In an October report, USDA's WASDE experts forecast a reduction in wheat supplies, consumption and trade in FY2024/25, as well as an increase in ending stocks. Supply is expected to decrease by 1.9 million tons to 1.06 billion tons, consumption by 2.4 million tons to 802.5 million tons, exports by 0.7 million tons to 215.8 million tons, while ending stocks are expected to increase by 0.5 to 257.7 million tons, although they will remain the lowest since 2015/16 MY. Compared to the previous season, the Russian Federation will reduce wheat exports from 55.5 to 48 million tons (and will remain the largest exporter), the EU - from 37.87 to 30 million tons, Canada - to 26 million tons, Australia - to 25 million tons, Ukraine - from 18.58 to 16 million tons, while the USA will increase supplies from 19.24 to 22.45 million tons.
The corn export forecast was reduced compared to September estimates from 191.37 to 190.5 million tons (195.75 million tons last year), in particular for Ukraine to 24 (29.6) million tons and the Russian Federation, but increased for the USA from 58, 42 to 59.06 (25.23) million tons. For Brazil, the estimate was left at the level of 49 (46) million tons, and for Argentina - 36 (32) million tons. The import forecast was lowered for China and Iran and increased for Egypt and the Philippines . World final stocks of corn are estimated at 306.5 million tons.
The forecast of the world production of oilseeds has been reduced compared to September estimates from 687.42 to 687.32 million tons (657.56 million tons last year), in particular for the USA - by 0.3 to 134.4 million tons, while for other countries it has been increased by 0.2 to 552.9 million tons, primarily due to an increase in sunflower and cotton production, which offsets a slight decrease in soybean and canola production.
