The International Grains Council on Thursday cut its forecast for global maize and wheat crops in 2012-13, further tightening supplies with grain stocks at the end of the season seen sinking to a five-year low.
"Inventories (of grain) for the major exporters will be even tighter and the smallest for 17 years," the IGC said in a monthly market report.
The IGC cut its forecast for total grain stocks at the end of the 2012-13 season by four million tonnes to 328 million, now representing a fall of 44 million or 12 per cent from year-earlier levels.
"Reduced availabilities and higher prices are expected to ration demand, resulting in the first year-on-year fall in grains consumption since 1998/1999," the IGC said.
The IGC cut its forecast for the global maize crop in 2012-13 by three million tonnes to 830 million, mainly reflecting lower estimates for the United States and Ukraine.
A severe drought in the U.S. has contributed to a sharp fall in global maize production this season from the record 876 million tonnes harvested in 2011-12.
The U.S. maize crop was seen at 272 million tonnes, down from a previous estimate of 275 million and well below the prior season’s 313.9 million.
The IGC also cut its forecast for the maize crop in Ukraine to 19 million tonnes from 20 million.
"Northern Hemisphere production prospects have mostly worsened. Although sowing is slightly delayed, the outlook for South American crops remain mostly favourable," the IGC said.
The IGC’s forecast for Argentina’s maize crop was raised by one million tonnes to 26 million while the projection for Brazil was kept at 72 million.
Global maize consumption in 2012-13 was downwardly revised by one million tonnes to 848 million, down from the prior season’s 872 million.
"Despite a forecast three per cent contraction in demand, the stocks outlook has tightened further — end season inventories in the major exporters could shrink by almost one quarter," the report said.
The IGC also cut its forecast for the global wheat crop in 2012-13 by two million tonnes, to 655 million.
"Lower yields in the EU and Kazakhstan, as well as deteriorating prospects in Argentina and Australia, reduced the forecast for world (wheat) production," the IGC said.
— Nigel Hunt is a Reuters correspondent in London, England.