Sharp Decline Forecast for World Cereal Stocks

World cereal end-of-season stocks are expected to decline 10% in 2006, due to a slight 1% decrease in global cereal output and growth in utilization, according to the latest forecast of the UN Food and Agriculture Organization (FAO).

Increased demand is expected to be driven by a recovery in feed use due to a rebound in poultry consumption. In addition, the growing demand for ethanol is likely to boost industrial use of coarse grains, particularly maize, especially in the United States and in China.

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