World Corn Outlook Raised by IGC on Ukraine as Wheat Seen Up

The world’s corn harvest will be bigger in the 2013-14 season than predicted at the end of May on increased production in Ukraine, the International Grains Council said. The outlook for wheat production was also raised.

Corn output may jump to 946 million metric tons from 854.5 million tons in 2012-13, the London-based IGC wrote in an e-mailed report, lifting its outlook by 1.4 million tons. That will boost ending stocks to the highest in 13 years, it said.

Corn prices entered a bear market in April and are down 40 percent from last year’s closing high of $8.3875 on Aug. 21. U.S. farmers are expected to harvest the largest area of corn since 1936, according to the U.S. Department of Agriculture.

“Prospects for bumper crops in 2013-14 have weighed on grains and oilseeds prices over the last month,” the council said. For corn, “new crop futures were pressured lower by the prospect of a sharp increase in supplies.”

The record harvest will increase end-of-season corn stocks to 149 million tons from 119 million tons, according to the IGC, which left its prediction unchanged from the end of May.

Farmers across the world are forecast to reap 683.1 million tons of wheat, up from a 2012-13 crop estimated at 655 million tons and 1 million tons more than previously predicted, the IGC said.

Wheat Stockpiles

Stocks of wheat are predicted to increase to 181 million tons from 179 million tons, 1 million tons more than previously expected, according to the IGC. The rise in production will be “largely absorbed” by an increase in demand, it said.

Total output of grains excluding rice may climb to 1.92 billion tons from an estimated 1.78 billion tons in 2012-13, the IGC wrote. Rice production is seen rising to 476 million tons from 470 million tons, lifting stocks for a ninth year to 109 million tons from 107 million tons, the council forecasts.

The outlook for bigger grain harvests in the U.S., Europe and the Black Sea region has hurt prices. Corn is the second-worst performer on the S&P GSCI gauge, behind silver, this year, sliding 28 percent.

Ukraine’s corn harvest is seen climbing to 23 million tons from 20.9 million tons, with the forecast raised by 1.4 million tons. Italy’s outlook was cut to 7.5 million tons from 8.2 million tons, compared with 7.1 million tons harvested in 2012.

Corn Exports

Corn exports from the U.S. will climb to 30 million tons from 20.7 million tons in 2012, with the outlook cut by 2 million tons amid competition from Brazil, Argentina and India.

Wheat production in Pakistan is seen climbing to 24.2 million tons from 23.3 million tons, 1 million tons higher than predicted May 31. The outlook for India was cut by 2 million tons to 91.5 million tons, compared with 94.9 million tons harvested last year.

The outlook for the wheat harvest in Egypt, the world’s biggest importer of the grain, was lifted to 9.4 million tons from 9 million tons, climbing from 8.5 million tons in 2012. Australia’s outlook was raised by 500,000 tons to 25 million tons, compared with 22.1 million tons a year earlier.

Europe will grow 1.2 million tons more wheat than predicted at the end of May, with output climbing to 143.3 million tons from 134.7 million tons on an improved outlook for Bulgaria, Hungary and Romania, it said.

Wheat exports by the European Union are predicted to slip to 20.3 million tons from 21.8 million tons. The outlook for shipments was raised by 1.65 million tons from the end of May as India is seen exporting 4 million tons of wheat, 2 million tons less than anticipated previously.

Farmers across the globe are seen harvesting 138.8 million tons of barley from 129.4 million tons in 2012-13, with the outlook raised by 1.1 million tons from May on higher estimates for Spain and Germany.

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