May 26 (Bloomberg) -- World wheat production in the year through June 2012 will be less than forecast a month ago as dry weather in Europe and the U.S. hurts crops, the International Grains Council forecast. The U.S. corn outlook was also cut.
Farmers around the world will reap 667.3 million metric tons of wheat in 2011-12, 4.9 million tons below the April outlook and compared with output of 649.1 million tons in 2010-11, the London-based council said in an e-mailed report today.
Shrinking stocks of wheat and corn have lifted grain prices in the past 12 months. World food costs were close to a record in April, according to the United Nations’ Food and Agriculture Organization. Rising food costs contributed to protests and riots across north Africa and the Middle East this year that toppled leaders in Egypt and Tunisia.
“The outlook for 2011-12 wheat crops has been affected by unfavorable weather in a number of regions, especially in the EU and U.S.,” the council said. For corn, “the reduced outlook in the U.S. is balanced by a higher forecast for China.”
Global grain production will rise 4 percent to 1.803 billion tons in the year through June 2012, 5 million tons less than last month’s outlook. Consumption will advance to 1.812 billion tons, eating into stockpiles, the council estimates.
World grain stocks will slide for a second year in 2011-12 to 338 million tons at the end of June next year, down an estimated 10 million tons, as corn usage outpaces production and dry weather hurts wheat prospects, according to the council.
Wheat prices have jumped 76 percent in Chicago in the past 12 months and climbed 64 percent in Paris while corn more than doubled in U.S. trading.
World corn production will climb 4.4 percent to 847.5 million tons, 1.1 million tons above the April forecast, as higher estimates for China and Ukraine more than make up for a cut to the U.S. estimate.
The U.S. corn harvest, the world’s biggest, is expected to rise 7.5 percent to 340 million tons, 5 million tons less than last month, as wet weather causes planting delays, the grains council said. China’s corn crop may climb 3.1 percent to 170 million tons, up from last month’s forecast for the crop to be unchanged at 165 million tons.
Corn stocks in the world are forecast to decline 5 million tons to 116 million tons, the lowest in nine years, as consumption of the grain rises to 1.812 billion tons.
“Even a record outturn of 340 million tons may not be sufficient to build 2011-12 ending stocks,” the council said. “High prices may result in stiffer competition from other feed ingredients, mainly Black Sea lower-grade wheat.”
The council lowered its outlook for EU wheat production to 141.1 million tons, down 3 million tons from April, on reduced estimates for harvests in France, Germany, Poland and the U.K. Russia will collect 54 million tons of the grain, 1 million less than forecast a month ago and up from 41.5 million tons in 2010-11, the council said. The U.S. wheat crop was trimmed by 1.5 million tons to 56 million tons.
“The cut from last month is mainly for wheat, reflecting overly dry conditions in the southern U.S., much of Europe and parts of the CIS,” the grains council said, referring to the former Soviet Union.
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