World corn production will be lower in the year through June 2012 than forecast a month ago after the outlook for the U.S. crop was cut, theInternational Grains Council said.
Global corn output in 2011-12 will be 845.2 million metric tons, down from 849.1 million tons forecast in August, the London-based IGC said in a monthly report published today, cutting its outlook for a second time in two months.
Corn futures have gained 5.5 percent in Chicago this year amid deteriorating crop conditions in the U.S., the largest grower and exporter. That contrasts with wheat, which slumped 19 percent as the outlook for harvests in the European Union and Russia improved.
“Global crop prospects have declined somewhat in the past month, mainly because of a reduced U.S. maize forecast,” the IGC said, using another name for corn. “The U.S. maize production forecast is only partly balanced by an enhanced outlook for crops to be planted inSouth America.”
The U.S. corn harvest is estimated at 315 million tons from a previous forecast of 325 million tons, and declining 0.4 percent from last year’s harvest of 316.2 million tons, according to the IGC.
The estimate for world wheat output was raised to 678.9 million tons from 677.1 million tons, led by higher forecasts for Australia, Russia and Morocco, the report showed. The council raised its outlook for a third time in as many months.
“Wheat crop prospects have improved somewhat, especially in the Southern Hemisphere,” the IGC said.
Corn Consumption
High corn prices will weigh on consumption, according to the IGC, which cut its outlook for global corn use in 2011-12 to 852.8 million tons, from a forecast of 857.7 million tons a month ago. Corn use is forecast to rise from 846.9 million tons a year earlier.
“With international prices likely to remain strong against a backdrop of tight U.S. supplies, growth in world demand will be slower than in recent years,” the grains council said. “High prices are expected to cap U.S. domestic and export demand.”
U.S. corn exports will slide 12 percent to 42.4 million tons, the IGC said, cutting its forecast for shipments by 2.6 million tons from August. Exports by Argentina, the second- biggest shipper, will rise to 16.5 million tons, up from the August estimate of 16 million tons, according to the report.
Outpacing Production
With corn consumption still expected to outpace production, world stocks of grain at the end of June 2012 are forecast to slide to 344.8 million tons from 358.6 million tons a year earlier, according to the report. The outlook for ending stocks was lifted by 2.4 million tons from August.
Wheat use is forecast to be 678.8 million tons from 655.6 million tons 2010-11, similar to production and leaving stocks little changed year-on-year at 192.9 million tons.
“Competitive prices relative to maize continue to promote the use of wheat in livestock feeds,” the IGC said. “Global industrial use is revised lower due to slower-than-anticipated expansion of ethanol production in the EU.”
The council raised the outlook for wheat exports by Russia, Australia and Ukraine, while cutting its forecast for U.S. shipments. Russia, which halted grain exports last year because of a crop-wasting drought, is forecast to boost shipments fourfold to 16 million tons, 500,000 tons more than in the August forecast, the IGC said.
The U.S., the world’s largest wheat exporter, may ship 28.5 million tons of wheat this marketing year, 2.1 million tons less than the quantity estimated a month ago, from an estimated 35.7 million tons in 2010-11.
World rice production on a milled basis is forecast to rise to 461 million tons from 451 million tons in 2010-11, and 3 million tons more than expected in August, the IGC said. Output will exceed consumption for a seventh year, lifting stockpiles to 101.2 million tons from 97.8 million tons, according to the council.
