April 21, 2011

Global corn output to rise to record high on-year

Corn output worldwide is seen to rise nearly 5% on-year in 2011-12 to a record 847 million tonnes although tight world supplies will limit demand growth, the International Grains Council (IGC) said Wednesday (Apr 20).

Global plantings of the grain are forecast to increase 3% compared with 2010-11 due to record high prices, the IGC said. US corn futures hit an unprecedented US$7.80 a bushel earlier this month and some analysts say they could go above US$8/bushel.

Yet despite the growth in world output, the IGC said it expects consumption growth to be constrained by low world stocks. Total corn supplies are expected to fall by 0.8% this year, the first on-year decline since 2002-03, with stock levels slumping 33 million tonnes to 119 million tonnes, the IGC said.

"Potentially tight supplies and firm market prices are expected to limit consumption growth to 1.3%," the IGC said.

The IGC also trimmed its estimate for world wheat production by one million tonnes to 672 million tonnes due to "less than ideal conditions" for crops in the US, Europe and China. Consumption is expected to grow to 672 million tonnes as livestock producers switch from expensive corn to wheat.

"Although meat demand will remain firm in number of developing countries, overall growth in maize use will likely slow, as livestock producers switch to wheat," the IGC said.

World production of grains in 2011-12 is forecast to rise 4.5% at 1.808 billion tonnes, due to a recovery in output from the EU, Russia and the U.S, although this is 10 million tonnes lower than world consumption of 1.818 billion tonnes.