The International Grains Council raised to a 27-year high
its forecast for world corn inventories, citing improved hopes for crops in
Brazil, Europe and Ukraine, as it hiked again its estimate for grain supplies.
The intergovernmental group raised by 3m tonnes to 190m tonnes its estimate
for world corn stocks at the close of 2014-15 – up 17m tonnes year on year and "their
largest since 1987-88".
The estimate, which takes the IGC's figure above the USDA
forecast for a 15-year top in world inventories, reflected an improved forecast
for global production, upgraded by 4m tonnes to 9763m tonnes.
"Northern hemisphere [corn] yield prospects continued to
improve in August, including in the US, where crops have benefitted from a prolonged
period of benign weather," the council said.
"The outlook for corn is notably higher, with a record
outturn in the US and upward revisions for Brazil, the European Union and
Corn vs wheat
However, the council also, turning to consumption trends,
highlighted the enhanced rivalry in the feed market with wheat, following a low
quality harvest in many producing countries, such as France.
"The world [wheat] harvest will include an above-average
proportion of low/medium grade supplies," the IGC said, a factor which would
become evident in "strong competition in most markets" between corn and wheat.
The "increasingly tight outlook for premium quality [wheat]
supplies", combined with Ukraine concerns, had also curtailed the decline in
wheat prices despite improving overall production prospects here too.
The IGC lifted by 11m tonnes to a record 713m tonnes its estimate
for global wheat output, citing "larger-than-expected crops in Russia, the European
Union and China".
Rice stocks to drop
For grains overall, the IGC raised its production estimate
by 17m tonnes to 1.976bn tonnes, just behind the 2013-14 record of 1.992bn
The estimate for world inventories at the end of 2014-15 was
lifted by 7m tonnes to 426m tonnes – up 22m tonnes year on year, and the
highest in 15 years.
The council also, in its first forecast for world rice
output in 2014-15, estimated production at 478m tonnes, up 2m tonnes year on
year, but insufficient to cover increased output, viewing rising by 6m tonnes
to 482m tonnes.
The dynamics will leave carryover stocks falling for a
second successive season, albeit remaining at a historically high level of 105m