September 23, 2011

 

Global corn output revised down

 

 

The forecast for global corn yield in 2011/12 has been reduced by the International Grains Council (IGC) on Thursday (Sep 22), indicating diminished prospects for the crop.

 

IGC also trimmed the outlook for consumption as high prices begin to curtail demand.

 

"With international prices for corn likely to remain strong against a backdrop of tight US supplies, growth in world demand will be lower than in recent years," the IGC said in a monthly update.

 

Prices for US corn futures <Cc1> rose to an all-time high of nearly US$8 a bushel in June and remain far above levels traded in 2010 despite a recent pullback driven by a gloomy economic outlook.

 

The IGC cut its forecast for the 2011/12 US corn crop by 10 million tonnes to 315 million tonnes, now below the prior season's 316.2 million.

 

Global corn production in 2011/12 was cut less sharply by four million tonnes to 845 million, still a record and up from 826 million in 2010/11.

 

"Despite a further reduction in US crop prospects, larger outturns in most other major producers are forecast to lift world output by 2%," the IGC said.

 

Corn stocks at the end of the 2011/12 season were put at 119 million tonnes, marginally above a previous forecast of 118 million but down from 127 million a year earlier.

 

"With production not quite matching consumption, year-end stocks are forecast to decline for the third year in a row," the report said.

 

Global wheat production in 2011/12 was raised by two million tonnes to 679 million, citing upward revisions for Russia, Ukraine and Australia.

 

Wheat consumption was also upwardly revised, by one million tonnes to 679 million, up from 656 million in 2010/11.

 

"Competitive prices relative to corn continue to promote the use of wheat in livestock feeds but global industrial use is revised lower due to slower than expected expansion of ethanol production in the EU," the IGC said.

 

Wheat is the main feedstock used in EU ethanol production, in contrast to the US, where it is based on corn and Brazil where sugarcane is used.

 

Wheat stocks at the end of the 2011/12 season were put at 193 million tonnes, unchanged from a year earlier.

 

The IGC projected global grain stocks, which include wheat and coarse grains, would fall to 345 million tonnes by the end of the 2011/12 season, down from 359 million at the end of the previous season.

 

"These will remain the smallest since 2007/08, with corn and barley inventories especially low," the IGC said.