The International Grains Council ditched expectations of rising world corn inventories thanks to the drought besetting the US crop, which is on course for its worst result since 2006.
The intergovernmental group said that corn inventories, which had had seen showing a healthy rise, would fall to a six-year low of 115m tonnes – of which only 26m tonnes would be accounted for by the major exporting nations.
The downgraded reflected a cut of 50m tonnes to 300m tonnes, also a six-year low, in its estimate for the US harvest, the world's biggest.
"The 2012-13 outlook for corn production has generally worsened, especially in the US, where high temperatures have reduced prospects," the IGC said.
Lower than USDA
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 USDA supply and demand report is looming," broker US Commodities said.
"There is no doubt that there will be reductions in the production end, but the question will be how much demand will be slashed and how inventive will the USDA be in making those cuts."
Separately, an annual crop tour by broker Doane put the corn yield in Iowa, America's top producing state, at 119.6 bushels per acre, compared with the 172.0 bushels per acre that growers achieved last year.
Informa Economics will on Friday unveil fresh forecasts.
Exporters' inventories
The IGC's forecast of lower world corn stocks deepened its estimate for the decline in world inventories of grains overall, which were now seen closing 2012-13 at a five-year low of 337m tonnes, down 29m tonnes...
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Source: Argentine Beef Packers S.A.
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