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The highlights of the report.

Maize (corn) and soyabean prices have soared to new highs on deteriorating output prospects in the US following the worst drought since 1956. Unfavourable weather conditions have also led to a scaling back of grains output and exportable surpluses in the Black Sea region, supporting gains in wheat and barley values.

The world 2012/13 total grains harvest (wheat and coarse grains) forecast has been revised lower to 1,810 million tons this month and is now expected to fall year-on-year.

The forecast for the US maize crop has been cut by 50m t, to 300m and the soyabean harvest has been reduced by 8.3m t to 79m. Wheat output has also been revised lower in both Kazakhstan and Russia.

Global carryover grains stocks are expected to fall by 29m t by the end of 2012/13, led by a 15m drop in wheat and 14m fall in maize; maize stocks are forecast at a six-year low.

Wheat

• The world wheat production forecast for 2012/13 is unchanged from the last GMR at 665m t, down 4.5% y/y
• China and India output is revised higher; but the combined forecast for the eight major exporters is again lower, as prospects in the Black Sea region have deteriorated
• Export potential is shrinking in the CIS, suggesting a shift to other origins, especially the US and EU
• World consumption is forecast to contract by about 2% y/y as lower feed use outweighs food and industrial growth
• Global stocks are forecast to fall by 15m t to a four-year low by the end of 2012/13

Maize

The 2012/13 outlook for maize production has generally worsened, especially in the US, where high temperatures and severe drought have reduced prospects

• The world crop is now forecast down y/y at 864m t, exporter availabilities are tightening and global carryover stocks are now expected to decline to the lowest level in six years
• World demand is projected to rise about 1% y/y, but forecasts for feed use are trimmed, due to higher prices and lower supply
• Industrial use is expected to decline, with US fuel ethanol production likely to fall y/y

Oilseeds

World 2012/13 soyabean production is forecast at 259m t, up 9% on last year, mostly reflecting prospects for a sharp recovery in output in South America

• Strong demand from Far East Asia, particularly China will underpin growth in world soyabean trade
• At 57.5m t, global soyameal trade is expected to be broadly unchanged on 2011/12
• Forecast rapeseed/canola 2012/13 output is broadly unchanged y/y as Canada offsets for declines elsewhere
• World rapeseed/canola trade is seen at a record 12.5m t, up 7% y/y, boosted by larger shipments to the EU and Asia

The full report can be read here.

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