World corn inventories are to fall for a third consecutive season in 2011-12, the International Grains Council said, in a report raising estimates for ethanol use, and lifting hopes for this year's wheat harvest.
The influential intergovernmental group, in its first outline forecast for the forthcoming corn season, said that production was likely to beat the all-time high of 813m tonnes set in 2009-10.
"Given initial planted area assumptions and, assuming trend yields, larger maize (corn) harvests are forecast in several key producers, including the US and China," the council said.
However, with demand "strong", the uptick in production may not be enough to rebuild supplies, currently heading towards their lowest for four years.
"Unless yields are exceptionally high… maize availabilities are projected to remain tight, with closing stocks set to fall for a third successive year."
Industrial demand
The comments came minutes after the US Department of Agriculture forecast that corn stocks in America, the top producer of the grain, would rise by a "modest" 190m bushels to 865m bushels, staying below the psychologically important 1bn-bushel mark for a second season.
The USDA forecast reflected in part greater expectations for corn consumption by ethanol plants, which the IGC also flagged in lifting by 2m tonnes its estimate for industrial use of the grain in current 2010-11 season.
The revision reflected "increased demand from US ethanol and high fructose corn syrup manufacturers", the IGC said.
The council trimmed by 1m tonnes to 119m tonnes its forecast for world inventories at the end of this season, just 2m tonnes from the recent low set in 2006-07, at the start of the last crop price spike.
Wheat prospects
For wheat, the IGC lifted by 2m tones to 672m tonnes its estimate for the 2011-12 world harvest – leaving it second only to the record 2008 crop.
Sowings will reach a 130-year high of 224m hectares.
Nonetheless, with consumption also rising, "global wheat supply and demand is projected to be broadly in balance".Continue reading this article >>
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