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Corn drives IGC to axe idea of dip in grain stocks

The International Grains Council ditched ideas of a drop in world grain stocks this year, reflecting raised expectations for corn supplies, thanks in part to improved ideas for European Union and Russian harvests.

The intergovernmental group lifted by 8m tonnes to a five-year high of 398m tonnes its estimate for world grain stocks at the close of 2014-15.

The upgrade, meaning a rise from the 396m tonnes expected at the close of this season, was down to revisions in the corn balance sheet, in part thanks to revisions on historical industrial use in China, the second-largest corn producer and consumer after the US.

However, the IGC also raised by 5m tonnes to 955m tonnes its forecast for world corn production in 2014-15, reducing to 15m tones the decline, "on lower yields", from last year's record harvest.

Harvest upgrades

The estimate for US corn output was left unchanged at 350m tonnes, (13.78bn bushels), some 4.0m tonnes below the US Department of Agriculture forecast for the domestic crop.

The second largest harvest, China's was kept at 215.0m tonnes.

However, production estimates were raised for Brazil, Mexico, Russia and the European Union, where the crop was upgraded by 500,000 tonnes to 65.8m tonnes, the latest in a series of upbeat estimates for the harvest.

Analysis group FO Licht this week pegged the EU crop at 66.4m tonnes, above the 64.3m tonnes in 2013-14, on its data.

Wheat forecasts

The extra supplies mean that world corn stocks now look set to rise in 2014-15 too, by 8m tonnes to 172m tonnes, rather than falling 1m tonnes, as the IGC had previously forecast.

"While world [corn] demand is seen expanding further in 2014-15, growth in feed and industrial uses will be much slower compared to last year," the council said.

For wheat, the IGC lowered its estimate for world production by 3m tonnes to 694m tonnes, "with average yields retreating from last season's unusually high levels".

However, the estimate for wheat stocks at the close of 2014-15 was left at 187m tonnes, a drop of 4m tonnes year on year.

"Trade is seen lower year on year, at 145m tonnes as, assuming a better quality domestic harvest, China's purchases are expected to fall."

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