SURPRISINGLY higher forecasts of US wheat and corn consumption has lifted global grain prices.In its latest World Agricultural Supply and Demand Estimates report released on Friday, the US Department of Agriculture lifted its outlook for US wheat consumption by one million tonnes to 37.4 million tonnes and reduced stocks by the same amount.
US wheat stocks are now forecast to end the 2012-13 season at 19.5 million tonnes, their lowest level in four years.
The USDA also reduced its forecast of world wheat production by 800,000 tonnes to 654.3 million tonnes and stocks by 300,000 tonnes to 176.6 million tonnes.
The revised forecasts resulted in Chicago Board of Trade March wheat futures jumping 34 US cents a bushel on release of the report but falling back by trading’s close to end up 10 US c/bu (or $A5 a tonne, after taking into account exchange rate movements) higher than the previous day.
The USDA lifted its estimate of corn consumption in the US by 7.6 million tonnes to 262.1 million tonnes, and cut the forecast for corn ending stocks by 1.1 million tonnes to 15.3 million tonnes.
Both reflected greater beef, pork and poultry production.
CBOT March corn futures ended the day 1.4 per cent higher at 709 c/bu, or $A266 a tonne.
Rabobank said the USDA’s report was bullish for grain prices.
“We expect grains, particularly CBOT corn, to show the largest upward price move as the USDA revised US corn stocks to below average trade estimates,” the bank said.