By Joanna Levin
US MAIZE prices have been flat over the past week, pressured by the bumper harvest and disappointing export demand.
The Chicago December futures contract closed on Wednesday 23 September at 205.5¢/bushel, down 1¢ from the day before and almost unchanged from the previous week. The market has eased slightly over the past month following its steep drop from 270¢/bushel in June.
Since this is an election year, the Government is expected to boost subsidies for beleaguered farmers. Suggestions centre around extending the Loan Deficiency Payments which aim to cover the shortfall between market prices and farmers break-even with their creditors.
Under the existing LDP scheme, farmers are still responsible for marketing their maize after they receive LDPs. Market analysts warn that many producers have already collected their federal subsidies but not sold their maize yet, creating an overhang of supply in the domestic market.
The maize harvest has now started in earnest and is two weeks ahead of schedule in many parts of the American corn-belt, due to good weather conditions. The USDA rates 65% of the maize crop as “good to excellent”. American farmers are set to harvest the second largest crop on record at 9.74 billion bushels, according to Government estimates.
Meanwhile, in the export market many potential buyers are trying to delay their corn purchases because of the global economic uncertainty. In the week ending 10 September, the US exported a net 23.9 million bushels of maize, which is considered somewhat poor for the time of year.