January 20, 2012

International corn production is projected to increase by 4.2% from last season's 826.4 million tonnes in 2011-12, said the International Grains Council on Thursday (Jan 19).

"Despite a smaller US crop and a worsening outlook for South America, total corn production in 2011-12 is forecast to increase by 4%, to a record 861 million tonnes," the IGC said. "Harvests in China and Ukraine were especially large and, although forecasts have been reduced this month, Argentina and Brazil are still expected to produce record crops," the IGC said in its monthly report.

The US is expected to produce 313.9 million tonnes of corn - 0.9 million tonnes more than predicted in November - while crops in South American producers Brazil and Argentina are seen at 59 million tonnes and 23 million tonnes, respectively.

European corn output is pegged at an unprecedented 65 million tonnes - 0.3 million tonnes more than predicted in November, the London-based body said.

World 2011-12 wheat output was also revised higher by 6.6 million tonnes to a record 689.8 million, the IGC said, citing better-than-expected results in the southern hemisphere, especially in Argentina and Australia but also sizeable upwards revisions to estimates for China and Kazakhstan, the IGC said.

"Approximately half of the increase in the global supply figure is absorbed by greater feed use, as competitive prices relative to corn continue to capture additional demand," said the IGC. But world wheat stocks at the end of the current crop year are revised higher to 204 million tonnes, just below the record of 2.6 million tonnes in 1999-2000, said the IGC.

"Major exporters' stocks are projected to rise significantly in Kazakhstan and Ukraine, but those in the EU and US are to stay broadly unchanged," added the IGC.

In the Commonwealth of Independent States, Kazakhstan's wheat output for the 2011-12 crop year is forecast to hit 20 million tonnes, more than two million tonnes higher on the IGC's November estimate while Russia's output is pegged at 56.2 million tonnes. Ukraine's wheat output for the current crop year was also revised higher to 22.4 million tonnes, up from 21.5 million tonnes estimated in November.