(Updates with corn inventory outlook in second paragraph, 2013-14 wheat projection in eighth.)
Jan. 17 (Bloomberg) -- Global corn production may be 1.8 percent more than forecast a month ago as the outlook improved from Argentina to China, the International Grains Council said.
World output may total 845 million metric tons in the 2012-13 season, up from an estimate of 830 million tons on Nov. 29, the London-based IGC said today in an e-mailed report. The harvest still would be 3.6 percent smaller than a year earlier. Global inventories may drop to 113 million tons by the end of the season, the lowest in nine years and down from the November forecast of 116 million tons.
“Given official upward revisions for China and the U.S., and brighter prospects for Argentina, forecast global output is increased,” the IGC said. Still, “the market is particularly tight with global end-season stocks expected to be down by 20 million tons year-over-year.”
Corn futures traded at $7.275 a bushel today on the Chicago Board of Trade, about 20 percent higher than at this time last year. The grain rallied to a record $8.49 a bushel in August after drought in the U.S., the world’s biggest producer and exporter, slashed yields.
Total grain production was estimated at 1.777 billion tons, 0.9 percent higher than the November forecast while below the previous year’s harvest at 1.851 billion tons. Inventories may slide to a six-year low at 322 million tons, even as consumption declines for the first time in 14 years.
U.S. corn production may total 273.8 million tons in the 2012-13 season that began Sept. 1, in line with the U.S. Department of Agriculture’s forecast on Jan. 11, the IGC said.
Argentina, the world’s second-largest exporter, may harvest 27.5 million tons of corn, more than the previous forecast of 26 million tons, the IGC said. China, the biggest consumer after the U.S., may produce 208 million tons of the grain, compared with a previous forecast of 198 million tons.
World production of wheat may be 656 million tons, 0.3 percent higher than the council’s previous forecast while less than the previous year’s harvest at 696 million tons, the IGC said. Wheat production in the 2013-14 season is projected “tentatively” to rise 4 percent year-over-year, with crop acreage rising 2 percent.
“For wheat, the focus is now on the condition of the Northern Hemisphere 2013-14 winter crops, particularly in the parts of the U.S. that have experienced drought conditions,” the IGC said. “Analysis shows little correlation between reported end-November crop conditions and final yields, but as the rating for the current crop is at a historical low, it is uncharted territory.”
Soybean production may be 1.5 percent more than previously expected at 271 million tons, the IGC said. Record crops in South America will help stockpiles rebound, it said. The group left its projection for global rice output unchanged at 464 million tons.
--Editors: John Deane, Sharon Lindores