September 24, 2010
IGC's estimated corn deficit is higher than USDA's
The modest deficit in world corn output that US officials are forecasting this year may be an underestimate, the International Grains Council believes, cutting its forecast for American and Ukraine crops.
The influential grains authority cut by five million tonnes, to 824 million tonnes, its forecast for the global corn harvest in 2010-11, marginally below the estimate from the US Department of Agriculture, whose data are used as global benchmarks.
"Reduced estimates for the US and Ukraine more than offset larger crop projections elsewhere," the council said.
The revision follows continued reports of disappointing results from the US harvest, which is about one-quarter of the way through, while the impact of dry weather has prompted a series of cuts to analysts' hopes for Ukraine's crop.
However, the IGC kept its forecast for world consumption at 837 million tonnes, 7.5 million tonnes higher than expected by the USDA.
The IGC's decision, in a monthly report, to stand firm on its demand forecast reflected in part expectations that robust prices of other grains would drive livestock farmers to turn to corn.
"In the animal feed sector, corn use is expected to be boosted, while that of wheat will likely hold steady," the briefing said, flagging expectations of "strong global feed demand".
Comparatively higher prices of feed grade wheat and barley are expected to shift some demand to imported corn, especially in South Korea, the Philippines and Israel.
The IGC lifted by four million tonnes to 12 million tonnes its forecast for the shortfall in corn production, taking the total deficit over the last two seasons to 23 million tonnes - the size of the harvest in Argentina, the second-ranked exporter of the grain.
The USDA estimates the shortfall at less than 3.5 million tonnes.
The council also raised by one million tonnes, to 13 million tonnes, its estimate of the shortfall in wheat production, reflecting a small rise in hopes for trade.
The estimate for the world harvest was kept unchanged at 644 million tonnes.
"Reduced estimates for Russia and Pakistan are offset by improved prospects in Australia," the IGC said.