By Joanna Newman
US farmers are enjoying a spell of mild, wet weather across the cornbelt, ideal for their emerging maize crop.
As much as 75% of US maize is rated good to excellent by the US Department of Agriculture (USDA). But these fine conditions for producers spell bad news for the market.
With this yearís maize crop off to a healthy start and acreage yields looking promising, prices have come under pressure.
The Chicago July futures contract has lost ground over the past week, settling on Tuesday (15 June) at 214.3¢/bushel, down from 223.0¢ a week ago. At this time of year, the market is at the mercy of the weather, as demonstrated by the volatility of the past few weeks.
Despite these short-term concerns, the overall outlook for the US maize market is improving and this commodity is in better shape than wheat or soya beans.
The USDA has revised down its 1990/2000 beginning stocks estimate from 1.77 billion bushels to 1.73 billion bushels in its latest domestic supply and demand report.
While this is a positive for the supply balance, the figures still represent a substantial increase from the year-earlier inventory of 1.31 billion bushels.
On the export front, shipments continue to run at impressive levels. In the week ended 3 June, shipments of old crop maize totalled 54.4 million bushels and new crop maize 4.2 million bushels, above expectations.
For the year, the USDA is estimating 1.85 billion bushels of exports, down from 1.88 billion last year, however analysts believe this forecast may prove too conservative.