(Agrimoney) – World corn production will see a “sharp” fall in 2015-16, thanks to a retreat in yields from bumper levels, with the reduced output driving a drop in inventories to a three-year low, the International Grains Council said.
The intergovernmental group, in its first estimate for next season’s world corn harvest, forecast output tumbling by 49m tonnes to 941m tonnes, “as yields retreat from the high levels of the preceding year”.
The lower output will spur some drop in consumption, “mainly reflecting reduced feeding of corn in areas where huge crops stimulated use in 2014-15,” the council said.
However, the drop in demand will, at 13m tonnes, come short of the fall in production, prompting a drop in inventories by 20m tonnes to 171m tonnes, more than offsetting the build in world stocks this season.
Stocks to drop
The decline in corn inventories will be particularly marked in major exporting countries, “dropping by almost one-quarter” to 50m tonnes, the IGC said.
Inventories held in big exporting countries, such as the US, Brazil and Ukraine for corn, are seen as particularly important in setting world prices, in being readily available to the market.
Nonetheless, the council said that stocks of grains overall would remain “comfortable” at the close of next season, “albeit” down 5% at 406m tonnes.
“The ratio of stocks-to-use is expected to match the five-year average,” the council said.
Wheat dynamics
Overall grains production in 2015-16 was pegged at 1.94bn tonnes, a decline of 63m tonnes year on year, reflecting the drop in corn output and a forecast decline in the world wheat harvest.
Wheat output was pegged at 709m tonnes, down 10m tonnes year on year, although 4m tonnes above the IGC’s initial estimate, released last month.
Global wheat stocks were seen falling by 2m tonnes to 196m tonnes, again a figure larger than last month’s estimate, of 192m tonnes.
