November 21, 2007

World coarse grains to reach all-time highs

The US Department of Agriculture has increased forecast for global coarse grains for 2007/08 this month and is expected to reach all time highs despite record coarse grains prices and very high freight rates.

World grain projections this month increased 1.1 million tonnes (mt) to 1,054.4 mt, as a reduction in US corn prospects was more than offset by foreign increases. Foreign coarse grains production prospects increased 4.5 mt to 700.7 mt.

The largest change in foreign production forecast for 2007/08 was a dramatic decline in Nigeria. Reduced area planted and dryness during critical growth stages cut corn production prospects by 2.5 mt to 6.5 mt. Sorghum was also hurt by dryness, and Nigeria's coarse grains production was reduced 3.2 mt this month to 24.0 mt.

Drought continued into October in parts of Australia, reducing barley production prospects a further 0.7 mt this month to 5.5 mt. However, good rains for planting in the sorghum region boosted area and production prospects slightly.

Provincial reports from China indicated larger-than-previously expected corn area planted and good yields, boosting projected corn production 2.0 mt to 145.0 mt.

Good rains in Ethiopia boosted coarse grains production prospects 1.7 mt to 10.8 mt, with increases for corn, sorghum and barley. EU-27 coarse grains production prospects increased 1.3 mt this month to 135.2 mt as increases for corn in Italy and France more than offset declines in Hungary and Romania.

Good monsoon rains and attractive prices boosted India's corn production prospects 0.8 mt to 4.8 mt. Harvest reports from Mexico, supported by good growing conditions in key growing areas, boosted sorghum area and yields, increasing projected production 0.6 mt to 6.0 mt.

Better than expected corn yields were reported in Ukraine boosting production from 0.5 mt to 7.0 million. Yields, however, remain down year-to-year for Ukraine as some regions suffered from drought Belarus corn production was added to the database for several years, reaching 0.4 mt forecast for 2007/08.

Good rains boosted Niger millet production 0.3 mt to 3.2 mt and Malawi corn production 0.25 mt to 3.4 million, concludes the USDA report.