The International Grains Council Thursday reduced its estimates for world wheat and corn production in 2012-13, with total grain output now expected to be down 5% on the year.
The London-based body said its forecast for global grains production had been cut by 6 million metric tons to 1,761 million tons, with reduced availabilities and higher prices expected to ration demand and result in the first year-on-year fall in consumption since 1998-99.
The IGC said its latest monthly forecast shows a further tightening in the global grains balance, with ending stocks for the 2012-13 season revised down by 4 million tons, to 328 million tons. This would be the lowest level since 2007-08, while inventories for major exporters would be even tighter and at their smallest for 17 years.
The IGC trimmed its world wheat production estimate by 2 million tons, to 655 million tons, due to lower yields in the European Union and Kazakhstan, as well as deteriorating crop prospects in Argentina and Australia.
It added that sentiment for wheat remains generally bullish, underpinned by evidence of very thin export supplies in the Black Sea region, while export forecasts have been cut for the U.S. and Australia in favor of bigger shipments by Russia and India.
The IGC also reduced its global corn output estimate by 3 million tons, to 830 million tons, as production prospects in the Northern hemisphere have mostly worsened.
It added that EU corn import needs are rising but, with M exico and China likely to buy less, world trade is forecast to slip to a three-year low.
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