July 24, 2012

US drought may stretch down global corn production

US corn crop production may slide 20-25% due to the prevailing drought weather conditions and is likely to pull the global production prospects down.

Global corn production may see a drop of 60 million tonnes for the upcoming season. Earlier before the drought in US, USDA has pegged the global corn production at 905.2 million tonnes and consumption was forecast at 900.5 million tonnes. With the drop in produce the price of the commodity is likely to surge to new record heights in global market as the demand for the commodity from poultry and livestock industry is increasing. The production in wheat and oilseeds also added demand to corn in the global market.

In Inter Continental Exchange (ICE) corn for September delivery traded at US$8.105 per bushel and in India's National commodity and Derivatives Exchange (NCDEX) the commodity for August delivery traded at INR1,576 (US$28) per quintal on July 23 at 14:45 IST.