World corn production will fall 0.7 percent after crop conditions deteriorated in the U.S., the International Grains Council forecast, reversing its outlook for the harvest to climb to a record.
Farmers across the world will harvest 863.5 million metric tons of corn in the 2012-13 crop year, 53.7 million tons less than forecast on July 2, the London-based council wrote in an e-mailed report today. The crop is expected to slip from 869.9 million tons in 2011-12.
Corn futures have jumped 55 percent on the Chicago Board of Trade since mid-June as drought wilted crops in the U.S., the world’s largest grower, and Ukraine. Surging grain costs will lift food prices globally in July, according to the United Nations’ Food & Agriculture Organization.
“Severe drought in the U.S. has lowered expectations for a replenished supply this fall and driven commodity futures prices to record levels,” Alberto Weisser, the chief executive officer of commodity trader Bunge Ltd., said in an earnings report today. “Large crops next spring from farmers in South America will help provide relief to a stressed market.”
U.S. farmers are expected to reap 300 million tons of corn, 50 million tons less than predicted at the start of the month and below the 313.9 million tons harvested in 2011, the grains council said.
“The 2012-13 outlook for maize production has generally worsened, especially in the U.S., where high temperatures and severe drought have reduced prospects,” the council wrote, using another name for corn.
About 26 percent of the U.S. corn crop was in good or excellent condition as of July 22, down from 31 percent a week earlier, the U.S. Department of Agriculture reported this week.
The outlook for Ukraine’s corn harvest was reduced to 21 million tons from 24 million tons previously, and compared with last year’s production of 22.8 million tons, the report showed.
World wheat production is seen at 664.6 million tons, 500,000 tons less than an earlier estimate and compared with a harvest of 695.9 million tons in 2011-12, the council said.
The outlook for Russia’s wheat harvest was cut to 45 million tons from 49 million tons at the start of the month and down from 56.2 million tons in 2011-12. Kazakhstan will harvest 12 million tons this year compared with 22.7 million tons last year, according to the council, which cut its July 2 forecast by 3 million tons.
Forecasts were raised for wheat production in China and India. The Chinese crop is estimated at 120 million tons, 3 million tons higher than previously expected, while the outlook for India was lifted 3.9 million tons to 93.9 million, according to the council.
World wheat stocks at the end of June 2013 may be 183 million tons, up from 182 million tons forecast previously, the council said. Corn stocks may fall to 115 million tons from 129 million tons a year earlier. The council had previously forecast stocks would climb to 137 million tons.
Global soybean production is forecast to climb 9 percent to 259 million tons, as output recovers in Latin America, the council wrote.
China’s grain imports may fall to 9.1 million tons from 9.9 million tons in 2011-12, compared with a previous outlook for the country’s purchases to climb to 12.1 million tons.
The council cut its outlook for grain exports by the U.S., Russia, Ukraine and Kazakhstan, while raising forecasts for shipments from Brazil, Canada, Australia and the European Union.