Analysts see bumper harvest for corn after devastating 2012

Corn, one of the world's key food crops, is expected to bounce back from last year's devastating drought with a bumper harvest in the coming season, traders said Wednesday. Last year, some 80 percent of farmland in the United States -- the world's biggest corn producer -- was scorched by extreme heat and drought which ravaged crops, sent global prices for the commodity soaring and hurt poor countries that depend on imports. In the 2012/2013 season, the global corn harvest plunged to 855 million tonnes from 883 million tonnes a year earlier. This upcoming season, however, the US Department of Agriculture (USDA) is forecasting a harvest of 960 million tonnes, of which the US is predicted to supply more than a third, offsetting a slight dip in Chinese production. "For corn there is an absolute turnaround compared with last season when there was a huge historical drought in the US," Commerzbank analyst Michaela Kuhl said. "Everything looks really good: the acreage is good and the weather is good. Everybody expects it to be a record high harvest on a global level thanks to the US," she said, adding that although weather conditions started out both damp and cold, "the problems turned out to be manageable". Another analyst, who declined to give his name, said: "The outlook for corn looks very, very good. They (dealers) are talking near perfect weather conditions so we're looking to have a bumper harvest". For wheat, which last year served as a substitute for the corn shortage and thus commanded higher prices, analysts also said the outlook was good. In its monthly forecast released on July 11, the USDA said the 2013/2014 global wheat harvest is predicted to reach 698 million tonnes, up from 655 million tonnes a year earlier. Despite a slide in production in Kazakhstan, US experts say the global production would be positive due to better-than-expected harvests in Australia, the European Union and the United States. "It looks quite good," Kuhl said, but added that a small stock deficit is likely as demand -- particularly from China -- is set to increase. Earlier this month, the UN food agency (FAO) said that world cereal production is set to reach new record levels in 2013, an increase of around 7.0 percentage points compared to last year. In afternoon trading on Euronext, wheat futures maturing in November dipped by 0.50 euros ($0.66) to 190.75 euros per tonne, while corn futures ending in August slid 0.75 euros to 222.00 euros per tonne, and those maturing in November fell 0.50 euros to 174 euros per tonne.