The world faces weaker production of both corn and wheat next
season, thanks to the likelihood of yields failing to match elevated levels of
the latest harvests, the International Grains Council said.
The intergovernmental group, in its first forecast for the
world corn harvest for 2014-15, pegged it at 954m tonnes, a drop of 5m tonnes
year on year.
Global sowings of the grain will rise by 1m hectares to a
record 175.5m hectares, as further increases in sowings in Ukraine, which has
grown to become the third-ranked exporter, and China offset decreases in the
European Union and the US, the biggest grower.
However, "assuming normal weather conditions, yields are
expected to fall short of the previous year's record levels," the IGC said.
Its figures assumed US corn area of 35.0m hectares (86.5m
acres) on a harvested basis, above the 84.6m acres that the US Department of
Agriculture forecast last week in its first estimates for this year's domestic
harvests, and down some 1.1m acres year on year.
For wheat, the council forecast a world harvest of 696.3m
tonnes, down 11.4m tonnes year on year, and trimmed from a previous estimate of
The downgrade reflected a cut of 500,000 hectares to the
estimate for world area, although this will still come in at 223.7m hectares on
a harvested basis, up 5.0m hectares year on year.
The revision reflected in the main a cut to forecasts for
harvested area in Ukraine, where wet weather hampered autumn sowings, and in
Turkey, where plantings were "hit by drought and then cold weather, raising
concerns of potential losses".
The IGC also highlighted that, broadly, "average yields are
unlikely to be as high as the exceptional levels seen in some countries during
the previous year".
Wheat trade prospects
With world wheat consumption rising by 7m tonnes to 698m
tonnes in 2014-15, lifted by food use prompted by population growth, production
will prove insufficient to cover demand.
However, the decline in stocks will only be of the order of
1m tonnes, leaving them at 189m tonnes.
And inventories held by major exporters, which are
particularly important for world prices, will actually rise, by 2m tonnes to
58m tonnes, the council said.
Indeed, global trade in the grain will actually fall by 5m
tonnes to 141m tonnes, undermined by lower Chinese and Iranian imports, while
exporters could face extra competition for the shrinking market "from sustained
sales by India".
Less promising for importers is that "at the projected crop
levels, the combined export surplus in the Black Sea region could be moderately
lower than the year before.
"Export demand for EU supplies could again be quite strong
if Black Sea shipments are no higher than in the current marketing year."