Global corn production is estimated to fall 0.7 percent on the damage done to crops by the U.S. drought, according to the International Grains Council. The harvest will now be 863.5 million metric tons of corn in the 2012–2013 crop year, 53.7 million metric tons less than forecast on July 2. The 2011–2012 crop was 869.9 million metric tons.

Corn futures have gone up 55 percent on the Chicago Board of Trade since mid-June between the drought in the U.S. and Ukraine. Increasing grain costs will lift food prices globally in July, according to the United Nations’ Food & Agriculture Organization. “Severe drought in the U.S. has lowered expectations for a replenished supply this fall and driven commodity futures prices to record levels,” said Alberto Weisser, the CEO of commodity trader Bunge Ltd. “Large crops next spring from farmers in South America will help provide relief to a stressed market.”


The International Grains Council cut its outlook for grain exports by the U.S., Russia, Ukraine and Kazakhstan, and increased forecasts for shipments from Brazil, Canada, Australia and the European Union.