By Joanna Newman
US maize prices have had volatile week, dropping 2% in value before rebounding.
The Chicago May futures contract settled on Tuesday (16 March), at 223.75¢/bushel, little changed from a week ago but up from 220¢ the previous day.
It is still too early in the season for US weather conditions to play a significant role in maize pricing, and the market is heavily influenced by the sharp fluctuations in wheat and soya bean prices.
In the domestic market, maize must compete with wheat as a feed grain, and any drop in wheat could cut into livestock maize consumption. This occurred briefly in February.
On the export front, US shipments have been running at healthy levels. In the week ended 11 March, 46.4 million bushels of maize were inspected for export, up from 30.0 million bushels the previous week.
However, international competition will soon heat up. The South American grain harvest is continuing apace thanks to favourable dry conditions and this is putting some pressure on US maize values.
Traders will pay close attention to the report on 1999 prospective plantings, to be released at the end of March.
Americas farmers are expected to plant only 78-79 million acres with maize this season, down from 80.2 million acres in 1998.
The shrinking acreage reflects the more attractive federal subsidies on offer for soya beans. Waterlogged fields in the south of the US could also encourage farmers to plant more soya beans instead of maize this spring.