June 13, 2008

Decline in US corn yield to be offset by abundant world grain prospect

The foreseen decline in US corn output will be offset by increased world grain production, specifically from Brazil, Ukraine, Russia and China.

The increased production prospects of the three countries will offset about two-thirds of the US drop, analysts estimate.

Ukraine's coarse grains production is projected to expand by 2.5 million tonnes this month to 22.2 million tonnes. The country's corn production is up 2 million tonnes to 10 million as favourable planting weather and attractive prices boosted corn area.

Russia's grain output prospects for 2008/09 increased 2 million tonnes this month to 33.6 million. Good planting conditions and high prices have also boosted corn area by 0.4 million hectares to 1.8 million.

Corn production is forecast to be up by 1.5 million tonnes this month to 6.8 million. The projection has skyrocketed by 72 percent from last year's output.

China's corn yield prospects for 2008/09 are up this month, with favourable planting conditions boosting forecast production by 3 million tonnes to 153 million.

US corn export prospects for 2008/09 were cut by 3 million tonnes to 50 million, giving way to competitors such as Brazil.

Brazil's estimated corn production for 2007/08 was increased by 2 million tonnes this month to a record 58 million. Corn area and yield increased due to strong corn prices and good rains that extended into the dry season in Mato Grosso.