By Joanna Newman
AT this time of year day-to-day weather patterns dominate the US maize market, as producers get under way with their spring planting.
This week has been no exception as maize prices were driven higher by concerns over planting delays.
But this “weather premium” could quickly evaporate if meteorological conditions shift in farmers favour.
Cold, wet weather in the Midwest and forecasts of more to come were the explanation for a rally in the Chicago May futures contract which settled at 224¢/bushel yesterday (Wednesday), up from 216¢ just over a week ago.
So far, planting activity is in line with the five-year average with 6% already in the ground, but farmers are nervously watching the skies.
Weather is the big story in South America too, where only 29% of the maize harvest is gathered, compared with a norm of 39% at this time a year ago.
Too much precipitation is the culprit here and US maize traders are using this as an excuse to raise prices.
Meanwhile indications of domestic demand are mixed.
A couple of major US purchasers have declared they will reject genetically modified maize, which could encourage farmers to switch acreage to soya beans this spring.
Feed demand for maize is likely to remain strong, going by the latest Cattle on Feed report.
In March, the number of feeder cattle placed in feedlots, where animals are fattened on grain rations, increased 22% year-on-year, while the total herd in the feedlots was up 3%.
- US corn processors ban GM crops, FWi, 15 April, 1999
- Click here for current Chicago corn (maize) prices