The world is set for a record maize (corn) crop with significantly larger harvests in the U.S., China and Mexico this year. But even though the U.S. ethanol market is approaching maturity, rising con sumption means that stocks are set to fall to a three-year low.
In its most recent estimates, the International Grains Council (IGC) put the 2010-11 world maize crop at a record 824 million tonnes, up from 806 million the year before.
The total harvested area was predicted 1.1% higher at 156.2 million hectares, while yield was predicted slightly higher at 5.3 tonnes a hectare, compared with 5.2 tonnes the year before.
The IGC puts the U.S. maize crop at 340 million tonnes, 7 million higher than its figure for 2009-10.
Mexico’s crop is put at 24 million tonnes, up from 21.3 million in 2009, while Chinese production is up to 162 million tonnes, compared with 154 million in 2009.
"U.S. weather conditions improved greatly in June," the IGC said. "Due to an early start to planting, yields are expected to be slightly higher than trend but somewhat lower than last year’s record." The IGC said that increased Chinese production was due to a "slightly bigger area and an expected increase in yields. Abundant rains benefited crops in southeastern and central parts of China, but more precipitation is required in the northeast, particularly in Manchuria." Despite the increased crop, the IGC predicted tighter stocks at the end of 2010-11, with carryover at a three-year low of 137 million tonnes, down 6 million from last year.
The U.S. Department of Agriculture (USDA), in its most recent World Agricultural Supply and Demand Estimates report, put U.S. 2010 maize production at 336.44 million tonnes, compared with its figure for 2009-10, which was 333.01 million tonnes and its previous estimate of 339.61 million tonnes.
Overall, the USDA cut its estimate for global coarse grain production by 10.8 million tonnes. As well as the cut in maize production, it said it had reduced its figure for the barley crop by 6.9 million tonnes and its oat crop number by 900,000 tonnes.
"Russia barley production is lowered 2.5 million tonnes as continued drought and high temperatures reduce yield prospects," the USDA said. "Russia corn and rye production are lowered 500,000 tonnes and 300,000 tonnes, respectively."
Canadian barley and oats production was lowered by 1.1 million tonnes and 900,000 tonnes, respectively, as persistent June rainfall limited plantings. Barley production is lowered 2.4 million tonnes for the E.U.-27, mostly reflecting lower reported area. Kazakhstan's barley production is lowered 800,000 tonnes as extended drought and high temperatures sharply reduce expected yields.
Like the IGC, the USDA predicted a fall in coarse grain ending stocks for 2010-11. "At the projected 180.2 million tonnes, coarse grain stocks would be the lowest since 2007-08," it said. Reduced use by the U.S. ethanol industry would be more than offset by increased feed and other uses. "Corn use for ethanol is lowered 50 million bushels reflecting the latest ethanol production data from the Energy Information Administration (EIA)," the USDA said. "Although daily ethanol disappearance set another record in April, daily production slipped below March’s record pace. EIA’s new weekly ethanol production data series (first reported for the week ending June 4) suggests June production, while up from April, will not reach the March pace."
In a commentary on the USDA report, the Netherlands-based bank Rabobank was cautious. "While the report is essentially neutral, the vulnerable state of new crop stocks and a 2010-11 stocks-to-use ratio approaching 10% indicate that risks remain firmly to the upside on any adverse weather developments," Rabobank said.