Friday, May 29, 2009

The Debts of the World: Corn, Wheat, and Soybeans Supply Crunch

IGC Cuts 09-10 World Grain Output To 1.72B Tons

The world’s 2009-10 grain crop is forecast at 1.721 billion metric tons, the International Grains Council said Friday.

The figure is 0.3% lower than the 1.727 billion forecast in April by the IGC and is 3.4% lower than its estimated 2008-09 figure of 1.782 billion tons. Grain production is expected to fall partly due to reduced crop output in the U.S. and the E.U. and a return to normal production levels following a bumper crops in 2008, IGC said.

“In the U.S. continued planting delays due to wet weather are likely to have a significant impact on yields and production may fall short of last year’s. Hot and dry conditions in south-eastern Europe are affecting E.U. crop prospects,” the council said.

World grain carry-over stocks in 2009-10 are expected to be 328 million tons, from 343 million tons in 2008-09. Meanwhile, the council raised its 2009-10 wheat output estimate by 0.2% from April’s to 652 million tons and lowered its 2009-10 corn output estimate to 771 million tons.

“Although the world wheat crop estimate (has) increased because of significant upward revisions for China and Russia, markets reacted nervously to the very difficult spring planting conditions in parts of North America and overly dry weather in southern and eastern Europe,” IGC said.
The corn estimate was ratched down, partly due to major planting delays in the U.S.’s eastern corn belt which suggested that more area might be switched to soyabean planting, thereby lowering corn yields.

World corn stocks are expected to fall 15.9% in 2009-10 to 118 million tons compared with 2008-09. The “biggest fall will be in the U.S., while stocks in China are expected to remain ample,” IGC said. Meanwhile, world wheat stocks are expected to rise 5.7% to 167 million tons in 2009-10 compared with 2008-09.

Source: CME News For Tomorrow
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