The United Nations' food body Thursday sharply lowered its forecast for world cereal production in 2012-13 due to dry weather concerns for the U.S. corn crop, but said that the overall supply and demand situation remains adequate.

The Food and Agriculture Organization cut its estimate of global cereal output by more than 23 million metric tons to 2,396 million tons, but said this would still be a record high and a 2% increase on the year.

Indeed, although the FAO's forecast for corn production in the U.S. fell by 25 million tons to 350 million tons, it said this would still be 11.5% higher than in 2011.

The FAO said the overall supply and demand situation in 2012-13 remains adequate thanks to abundant supplies of rice, a leading food staple, and sufficient exportable supplies of wheat and coarse grains.

Write to Michael Haddon at michael.haddon@dowjones.com

(END) Dow Jones Newswires

July 05, 2012 07:19 ET (11:19 GMT)