World grains harvest revised downwards for 2012-13
The world 2012-13 total grains harvest (wheat and coarse grains) forecast has been revised lower by the International Grains Council (IGC) to 1,810 million tons (mt) this month and is now expected to fall year-on-year. The IGC’s forecast for the US maize crop has been cut by 50 mt, to 300 mt and the soyabean harvest has been reduced by 8.3 mt to 79 mt. Wheat output has also been revised lower in both Kazakhstan and Russia.
Maize (corn) and soyabean prices have soared to new highs on deteriorating output prospects in the US following the worst drought since 1956. Unfavourable weather conditions have also led to a scaling back of grains output and exportable surpluses in the Black Sea region, supporting gains in wheat and barley values. Global carryover grains stocks are expected to fall by 29 mt by the end of 2012-13, led by a 15 mt drop in wheat and 14 mt fall in maize; maize stocks are forecast at a six-year low.
Agrimoney has said that the downgrade takes the council’s estimate for the US corn harvest well below the US Department of Agriculture’s own forecast, of 329.5m tonnes. The USDA, whose estimates are followed particularly closely by traders, also still foresees a small rise in world corn inventories. However, analysts have already started the countdown to the next USDA Wasde report, on August 10, when it will revise estimates for crops worldwide.
The IGC Grains and Oilseeds Index (GOI) reached an all-time high on 20 July, and, despite some recent easing, is still up 14% month-on-month (m/m). World soyabean production is expected to recover sharply in 2012-13, rising by some 9% year-on-year, although the forecast hinges on a strong rebound in output from South America where planting begins in the fourth quarter of 2012.
Rice output in 2012-13 is forecast up 1%, compared to 3% growth in the previous year, due to less rapid expansion in Asia, but consumption growth is also likely to be lower. In contrast to the steep weather-driven gains in grains and oilseeds markets, rice prices declined marginally, mainly on supply-side pressures in Thailand.