Wheat production this crop year to June in India could rise to a record, but corn and rice output is likely to be lower, according to the US Department of Agriculture.

However, prices of wheat and corn are likely to be under pressure as supply outstrips record demand for foodgrains, says Rabobank.

In its latest report on world markets and trade, the USDA has projected India’s wheat production at a record 95.9 million tonnes (mt) against 93.5 mt last year. The cause for the US agency’s optimism is unknown since sowing of wheat, a rabi or winter crop, is trailing this year.

Data from the Ministry of Agriculture show that until December 5, wheat was sown on 208.64 lakh hectares (lh) against 213.69 lh during the corresponding period a year ago. The area is down despite a ₹50 hike in the minimum support price for wheat at ₹1,450 this year.

Wheat offtake “Global production for 2014-15 is projected at a record with bigger crops in both Canada and Kazakhstan,” the USDA said, pegging the output at 722 mt against about 720 mt last season. Rabobank has projected wheat output at 718 mt.

World wheat consumption is estimated at 712.58 mt against 704 mt.

Food use is expanding because of population growth, urbanisation and rising incomes. “Growth is particularly strong in Sub-Saharan Africa and South-East Asia. Feed use is up as well, mainly driven by a huge jump in European Union usage,” the US agency said.

Price outlook Rabobank, on the other hand, has projected a 21 million tonnes rise in wheat consumption, which would match supply. In its price outlook, Rabobank expects wheat prices to drop in the first quarter next year to 520 cents a bushel (₹11,900/tonne) before rising to 530 cents (₹11,,950) in the second quarter and ending at 560 cents (₹12,800) in the last quarter.

The price scenario will change only if there is any adverse weather or geo-political tension leading to exports from the Black Sea region being affected. Though Indian crop will be lower at 102 mt against 106.54 mt a year ago, the world market will be well-supplied.

Rice & Corn Global rice production will be a tad lower than last year’s record at 475 million tonnes, the USDA said. China, Guyana, South Korea and Vietnam will offset reduction in Indonesian and Indian production, it said. Consumption of rice, however, is seen 2 mt higher at 482 mt.

Corn (maize) production and exports from India will be lower this year. The US farm agency has projected production at 37.3 mt against 42.7 mt a year ago. While kharif production has been projected at 16.03 mt (17.68 mt), sowing in rabi is down for coarse cereals at 43.12 lh (46.07 lh).

Global corn output has been estimated at 1.27 billion tonnes against 1.28 billion tonnes a year ago.

Higher output in China and the EU will compensate the lower output in India and other countries such as Argentina.

Corn price estimate Corn exports from the country are seen dropping to 2.8 mt against 4.5 mt a year ago, in line with a drop in global trade. Global shipments of the coarse cereal will decline to 147 mt from 164 mt a year ago.

While the US sees drop in domestic consumption of corn in producing nations, Rabobank estimates a marginal rise of 2 mt. Both, however, have pegged the carryover stocks to next season at a record.

Rabobank said corn prices will bottom out in the first quarter next year at 360 cents a bushel (₹8,850/tonne) and rise to 380 cents in the third quarter (₹9,350) before slipping to 360 cents. Lower crop in South America or drop in US plantings will be factors that could see corn prices rising, Rabobank said.

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