According to the International Council of cereals (CIC), global stocks of grains at the end of the 2024-2025 campaign would drop to less than 600 Mt, to 584 Mt (October 2024 figure), the lowest in a decade. This year again, and as has been the case since 2022-2023, consumption should exceed global production (see International Grains Council graph). Nevertheless, “supply is decreasing, but demand is not very dynamic either”notes Alexander Karavaytsev, CIC economist, during Global Grain in Genevaorganized by the company Fastmarkets, from November 12 to 14, 2024.
“Supply is decreasing, but demand is not very dynamic either”says CIC economist Alexander Karavaytsev.
Also read: 2024 US wheat production estimated by USDA (slightly) exceeds expectations
Drops in cereal production in Europe and America but…
Production and consumption should indeed grow annually between 2023-2024 and 2024-2025, but at a lower rate than what was observed during the prosperous period from 2017-2018 to 2021-2022 (see International Grains Council graph). On the supply side, we now know the setbacks of harvests of wheat and of but in various major export basins: European Union, Eastern Europe (Russia, Ukraine), continent American (Argentine in corn in particular), etc. On the other hand, the slowdown in demand growth is less intuitive. It can be summarized as follows: the CIC generally expects a less intense consumption of wheat and corn than expected within the continents Asian et African.
Global grain production and consumption between 2015-2016 and 2024-2025, in millions of tonnes. Source: CIC.
On the wheat side, “a new peak in global human consumption is expected for the 2024-2025 marketing year, but the pace of this growth appears to be slowing, especially in Asia and sub-Saharan Africa”raises Alexander Karavaytsev. The reason: increased competition from the use of rice in food rations in these regions.
Indians and Africans would turn more towards rice, to the detriment of wheat
In more detail, while human consumption Indian of riz would increase from approximately 115 Mt to 120 Mt according to CIC data annually, that of wheat would stabilize below 100 Mt. This is due to better accessibility of rice, linked to the good harvest. And the need to ration somewhat, in a context of more restricted global wheat supply. In sub-Saharan Africa, the use of rice in human food would increase from approximately 37 Mt to 38 Mt, while that of wheat would only increase from 34 Mt to 34.5 Mt.
China’s corn needs plummet
As for corn, the primary cause of the slowdown in international demand comes from China. The country experienced a good grain harvest this year, reducing its needs. This partly justifies the prediction “a decline in international trade of around 7%”says Alexander Karavaytsev. They would increase from 195 Mt to 181 Mt between 2023-2024 and 2024-2025. For their part, Chinese imports would fall, going from nearly 25 Mt to 15 Mt over the same period.
“We have a very slightly bullish view of the wheat and corn market. But there are many uncertainties,” according to Alexander Karavaytsev.
What consequences will these elements have on international prices? The CIC economist is very cautious: “We have a very slightly bullish view of the market in wheat, the quality of which has generally deteriorated compared to last year, and in corn. But there are many uncertainties”. The fact that demand exceeds supply is indeed a bullish element. But information in various regions of the globe must be refined, both fundamentally and geopolitically.
Russia and Ukraine can surprise us
Firstly, the situation in Black Sea and countries such as Ukraine and Russia may surprise grain market operators. Alexander Karavaytsev recalls that “shipments from Russia, very dynamic since the start of the 2024-2025 commercial campaign, should slow down, and benefit Western European countries. But the Russians have already surprised us in the past, sometimes exporting more than expected”. Same observation on the side of Ukraine. And this, despite the war, which blurs the cards and makes export, production and consumption forecasts much more uncertain.
What will Turkey do about its wheat imports?
China has large volumes, as does India, reducing their needs. But the reliability of the data from these countries remains, let us remember, a chestnut.
Then, no one is able to say what the Türkiye in 2024-2025. Pelin Ozer Yagar, founder of the brokerage firm MPM Gida, expresses the confusion surrounding the cereal trade policy of this major importer of soft wheat, especially from Russia: “the Turkish government implemented a ban on wheat imports from June to mid-October 2024. Then, it introduced the following restriction: for 85% of wheat purchased on the Turkish market by millers local, you can import 15% of goods. But what will happen in 2025? Impossible to say. Maybe they will change this ratio? Or something else? “.
Kazakhstan: will it manage to surpass its wheat export record?
The CIC also reports a very good harvest in Kazakhstanup 40% compared to last year in wheat. But the organization remains cautious about its ability to move volumes outside its borders. “We are forecasting 10-11 Mt of exports, while the previous record is 12 Mt. We remain cautious because we have difficulty understanding the real potential of their infrastructures, which are not always adequate for export. But it is entirely possible that we are pessimistic, and that Kazakhstan could ship more than expected”tempers Alexander Karavaytsev.
What if Argentina produced more corn than expected?
Concerning corn, the situation Brazil and in Argentine will be monitored very closely, as these countries are still sowing their 2024-2025 harvest. “We thought that the Argentines were going to sow much less corn because of the damage suffered by diseases last year and the complicated sowing conditions. But these have clearly improved in recent weeks”relates the CIC expert. An upward revision of the Argentinian production projection cannot therefore be ruled out in the coming months. In Brazil, the weight of the ethanol plant is increasing, stimulating domestic demand, adds Alexander Karavaytsev. It remains to be seen to what extent this will reduce availability for exports.
And the election of Donald Trump in all this?
The arrival (a second time) of Donald Trump to the Maison Blanche will obviously not be without consequences on the grain markets. However, it is difficult to project the direction of flows and prices, both global and local. Some will win, others will not, according to participants in a round table at Global Grain.
Brazilian grain exporters: winners of Donald Trump’s victory?
Remember that observers fear, for example, fewer US shipments of corn to China, in response to US tariffs (as was the case during the first term from 2016 to 2020). This constitutes a potentially bearish factor for the CBOT corn contract at Chicagoand penalizes American exporters. But Brazilian sellers “celebrated the victory of the Republican candidate, who hope to see Chinese interest skyrocket in our origins, as do prices”warns Frederico Humberg, director of AgriBrasil, a Brazilian company specializing in offering logistics services for grain exporters.
“The only thing we can predict is that there will likely be the introduction of customs tariffs on imports of Chinese and European goods. But the consequences for retaliatory measures on US corn and soybeans are purely speculative. It will also be necessary to observe the policy of incorporation mandates (biodiesel et bioethanol) »summarizes Alejandra Castillo, president of the North American Association of Grain Exporters (bringing together operators of UNITED STATES but also Canada a you Mexico).
