World's Supply of Corn Hits a 27-Year High

From Agrimoney:

The International Grains Council raised to a 27-year high its forecast for world corn inventories, citing improved hopes for crops in Brazil, Europe and Ukraine, as it hiked again its estimate for grain supplies.

The intergovernmental group raised by 3m tonnes to 190m tonnes its estimate for world corn stocks at the close of 2014-15 – up 17m tonnes year on year and "their largest since 1987-88".

The estimate, which takes the IGC's figure above the USDA forecast for a 15-year top in world inventories, reflected an improved forecast for global production, upgraded by 4m tonnes to 9763m tonnes.

"Northern hemisphere [corn] yield prospects continued to improve in August, including in the US, where crops have benefitted from a prolonged period of benign weather," the council said.

"The outlook for corn is notably higher, with a record outturn in the US and upward revisions for Brazil, the European Union and Ukraine."

Corn vs wheat

However, the council also, turning to consumption trends, highlighted the enhanced rivalry in the feed market with wheat, following a low quality harvest in many producing countries, such as France.

"The world [wheat] harvest will include an above-average proportion of low/medium grade supplies," the IGC said, a factor which would become evident in "strong competition in most markets" between corn and wheat....MORE