Despite ongoing talks about production challenges across a number of countries, the world is still well-supplied regarding grains and oilseeds.

The International Grains Council (IGC), indicated just last week in their monthly report that the 2015/16 global grains and oilseeds stocks were estimated at 472 million tons – 5% higher than the previous season. This followed a season where global grains and oilseeds production was estimated at 2.002 billion tons.

Even more encouraging were production forecasts for the 2016/17 season, with global total grains and oilseeds production set to reach 2.069 billion tons (3% higher than the previous season). At the same time, 2016/17 global grains and oilseeds stocks were estimated at 492 million tons (4% higher than the previous season).

The major contributing crops in these supply dynamics are maize, wheat, rice and soybeans.

IGC forecasts the 2016/17 global maize production at 1.027 billion tons, up by 6% year-on-year, with production increases expected in the US, Brazil, Argentina, South Africa, India and Ukraine. In the same season, global ending stocks are estimated at 216 million tons— up by 4% from the previous season.

For South Africa and India, the 2016/17 production season is set to be a rebound, following a drier El Nino Induced season in 2015/6.  More specifically, IGC forecasts South Africa’s 2016/17 maize production at 12.9 million tons, which is 72% higher than the 2015/16 season (7.5 million tons). In addition, this is along the upper end of industry estimates, which currently vary between 11.8 million and 13 million tons.

In the wheat market, 2016/17 global production is estimated at 747 million tons – 2% higher than the previous season. Significant increases are expected to come from Russia, with production set to rise by 15% year-on-year (y/y) to 70 million tons. The US is also set to be amongst the key producers, with 2016/17 total wheat crop set to reach 63 million tons – up by 13% y/y. In addition, Canada is predicted to be a key contributor to this expected production increase, with the 2016/17 total wheat production estimated at 31 million tons, up by 12% y/y. Australia’s 2016/17 total wheat production is set to reach 28 million tons – up by 17% y/y. Moreover, global ending stocks are estimated at 231 million tons, up by 6% from the previous season.

In the oilseeds cluster, the 2016/17 global soybeans production is estimated at 329 million tons, up by 4% from the previous season. Production increase is set to come from a number of countries. One amongst these is the US, with production estimated at 113 million tons (up by 6% y/y). In addition, Brazil will also be a key producer, with 2016/17 soybean production estimated at 100 million tons (a 5% y/y increase). Chinese 2016/17 soybean production is estimated at 13 million tons, up by 13% y/y. In the same season, global ending stocks are estimated at 29 million tons (down by 7% from the previous season). This decrease is due to a 3% y/y increase in global consumption to 331 million tons.

Overall, the 2016/17 season is likely to see large grains and oilseeds production across the globe, regardless of the La Nina fears (La Nina normally leads to drier weather conditions across a number of countries in the northern hemisphere and an opposite for southern hemisphere). Therefore, if South Africa does face a rebound in production, the country will have to compete for the export market in a global environment of relatively low prices, thus limiting the benefits for local farmers and agribusinesses.

*This article first appeared in October 14th issue of on Farmer’s Weekly Magazine.