By Joanna Newman
IN the wake of last weeks 7% drop, US maize prices have remained depressed amid further signs of a worsening glut.
The USA will be burdened with 1.80 billion bushels of maize inventory at the end of this crop year, its largest surplus in seven years, according to the latest US Department of Agriculture (USDA) Supply and Demand report.
This represents an upward revision from the 1.71 billion previously forecast for this year and is well above the 1.31 billion bushels of ending stocks for the 1997/98 season.
The news confirmed previous bearish stock reports from the USDA and the Chicago May futures contract settled on Tuesday (13 April) little changed from a week ago at 216.0¢/bushel.
Of immediate concern is the domestic weather pattern during spring farming.
Excessive rain may cause planting delays and encourage farmers to switch acreage to soya beans.
So far, conditions have been favourable and 4% of the crop is in the ground, slightly ahead of average.
However, the markets reaction to the weather is mixed, as continuing moisture could also alleviate fears of a La Niña-type drought and thereby drive prices lower.
Meanwhile exports are running well and lending some support to the maize market.
37 million bushels of maize were inspected for export in the latest reporting week, up from 33 million a week ago.