By Joanna Newman
IT has been another volatile week for the US maize market, with futures prices swinging widely in response to weather conditions.
Attention is fixed on government and private forecasts, which frequently contradict each other.
Prices soared late last week on predictions of hot, dry weather that could damage the young maize crop.
The Chicago July futures contract was reported on Tuesday, 8 June, at 223.0 cents/bushel, up strongly from 216.3 cents a week ago and its highest point in a month.
This years acres have only recently been planted, but even at this early stage in the season traders are closely monitoring the emerging crop for any signs of damage.
As much as 76% of the maize crop is rated good to excellent by the USDA in its latest weekly report, a slight improvement from the previous 75%. Clearly there has been no weather damage to the crop to date.
Traders are keeping a nervous eye on developments in the wheat market, which could spell competition for maize as a source of livestock feed.
The narrowing price premium of wheat over maize makes wheat more attractive in the animal ration.
Possible quality damage to some of the winter wheat crop could make those wheat bushels more suited to the feed market, further adding to the supply.