Sept. 28 (Bloomberg) -- The world corn harvest will fall more than expected a month ago after heat and drought damaged crops in Europe, the International Grains Council forecast.
Corn production will fall to 833 million metric tons in the 2012-13 crop year from 875.3 million tons in the previous year, the London-based council wrote in an e-mailed report today, cutting its previous outlook by 5.1 million tons.
Corn prices have surged 49 percent since mid-June on the Chicago Board of Trade, touching a record $8.49 a bushel on Aug. 10, as the worst U.S. drought in a half century and hot, dry weather in southern Europe and Ukraine cut yields.
“Demand is likely to fall given tight supplies and high prices, with both feed and industrial use expected to decline,” the IGC said. “Large Southern Hemisphere harvests should add to supplies in the second part of 2012-13, but favorable weather conditions are essential.”
The council last month forecast a corn harvest of 838.1 million tons, already reduced from a July 2 outlook for a record crop of 917.2 million tons. EU corn production will slump to 55 million tons from 65.5 million tons in 2011, according to the group, cutting its outlook by 4.9 million tons.
Farmers in Romania, the EU’s second-biggest corn grower in 2011, will harvest 6.5 million tons this year, 1.5 million tons less than predicted in August and down from 10.5 million tons last year, the council estimated.
The IGC kept its outlook for U.S. corn production to slide to 275 million tons from 313.9 million tons a year earlier and for Brazil’s harvest to be little changed at 72 million tons.
World wheat output was estimated at 657 million tons, down from 661.5 million forecast last month, as dry weather harmed crops in the Black Sea region, the IGC said. Farmers harvested a record 695.6 million tons last year, according to the council.
Russian farmers are now expected to reap 39 million tons of wheat, 2 million tons less than previously predicted and compared with 2011 production of 56.2 million tons. The outlook for Turkey’s wheat crop was cut by 1 million tons to 17.5 million tons, against a harvest last year of 18.8 million tons.
Wheat production in the EU, which accounts for a fifth of world output, is expected to fall to 131.4 million tons from 137.4 million tons in 2011, the council said. The group reduced its outlook by 1.7 million tons on lower estimates for France, Germany and the U.K., the bloc’s biggest growers.
The outlook for global wheat inventories at the end of 2012-13 was cut by 5 million tons to 175 million tons, while the council reduced its outlook for corn stockpiles by 2 million tons to 118 million tons.
Lower Russian exports will cut world wheat trade to 132.2 million tons from 145.2 million tons in the prior year. Global trade in corn is predicted to drop to 92.2 million tons from 95.5 million tons as higher Brazilian deliveries only partially make up for a drop in U.S. shipments, the council forecast.
Global production of soybeans may be 256 million tons in the 2012-13 season, up 8 percent from a year earlier, as South American output rebounds, the IGC said.
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