World corn inventories, which set to end this season at their smallest for four years, are poised to tighten further, grain experts have said in a report forecasting a 2% rise in wheat area for 2011-12.
The International Grains Council said that world grain stocks, which are on course to shrink by some 60m tonnes to 340m tonnes in 2010-11, "are expected to show some further decline" in future seasons.
"Corn supplies, in particular, are likely to tighten," the intergovernmental group said.
The IGC expects world corn stocks to end this year at 121m tonnes, the lowest since 2006-07, when they came in at 117m tonnes.
However, compared with consumption, this season's inventories give a "stocks-to-use" ratio, a measure of the tightness of supplies and therefore of the prices they can command, of 14.4%, lower than the 16.1% four years ago.
'Considerable downgrading'
The forecasts were revealed in minutes of a council meeting in Perth, Australia last week, which noted the "considerable downgrading" the country's crop is likely to suffer following heavy east coast rains.
While the minutes failed to reveal details of the council's thinking, they noted increased projections for grains consumption and an annual rise of 2% in world trade in grains, a rapid pick up on the recent performance.
The IGC last month said it expected trade in grains in 2010-11 to remain at about 240m tonnes for a third season.
Wheat seedings
The report also forecast a rise of 2% in world wheat area in 2011-12, an increase equivalent to about 4m-4.5m hectares on Agrimoney.com calculations.
The increase would reflect in part a "response to high prices", implying increased sowings, but also "reduced abandonment in Canada and Russia after this year's extreme summer weather conditions", the council said.
