WHEAT

The International Grains Council (IGC) on 27th November cut its forecast for global wheat production in 2014/15 by 0.4 MMT to a still record 717.2 million, up from the prior season's 712.5 MMT.

The downward revision was driven by a sharp cut to Algeria's crop which was put at just 1.9 MMT versus a previous forecast of 3 MMT and the prior season's 3.3 MMT. Algeria's grain harvest this year was hit by drought. Meanwhile outlook was improved for Ukraine, Argentina and the European Union, but cut for Kazakhstan and USA.

IGC said planting of northern hemisphere 2015/16 winter crops is almost finished. Based on tentative assumptions for spring sowings and for the southern hemisphere, total area is projected to rise by 1% year-on-year.

Global demand stimulated by lower prices, food use in developing countries is seen growing faster than average. Overall use is placed at a record 711.5 MMT, up 1.7 MMT compared to the October report and v.s. 694.8 MMT in 2013/14. Forecast feed consumption is raised by 2.1 MMT from the previous estimate to 141.2 MMT, placed 7% higher year-on-year, at a three-year peak.

Ending stocks of wheat are predicted to climb to 192.6 MMT from 186.9 MMT in previous year, according to the IGC, which lowered the outlook for inventories by 0.3 MMT.

CORN

The IGC projected world corn production at 982.3 MMT, up 2.6 MMT from last month's forecast but still below the prior season's record harvest (984.3 MMT).

The bulk of the 2014/15 northern hemisphere (corn) crop is now harvested and, with better than average yields in many countries, the world production forecast is increased. The corn crop in China, the world's number two producer, was put at 216 MMT, up from a previous forecast of 213.8 million but still just below the prior season's 218.5 MMT. Farmers in Europe will gather 73.4 MMT, 0.5 MMT more than predicted last month and versus 64 MMT year ago. The rise was partially offset by a downward revision for Argentina where a corn crop of 22.5 MMT is now seen, down from a previous estimate of 23 MMT and the prior season's 24 MMT.

Seeding in South America has so far progressed at a slower than average pace. While output in Brazil and Argentina is expected to decline, much will depend on final planting decisions and weather during the coming months.

Consumption is projected to increase to a new record – 962.9 MMT (961.2 MMT – previous forecast and 940.2 MMT in 2013/14). World demand is forecast to increase to record highs, driven by a 3% gain in feed consumption.

Corn carryover stocks are seen climbing to 195.3 MMT from 175.9 MMT in 2013/14, with the outlook raised by 1.2 MMT from last month, the report showed