Maize prices follow the weather in USA
By Joanna Newman
RAIN or shine? This is the time of year when US maize prices are at the mercy of the skies, as planting gets into full swing.
The past couple of weeks have proved no exception, with futures values spiking 5% from mid-April and then plummeting back.
Trading is volatile and market reactions to changing weather patterns are proving extreme.
Private weather forecasts in some instances conflict with the official 6-10 day national projections, adding to market nervousness.
Analysts argue that it is too early in the season for marginal planting delays to have significant impact on yields come harvest time.
On the other hand, extended wet conditions could encourage farmers to switch acreage to soya beans, which carry attractive federal subsidies.
Currently, farmers are behind schedule and only 10% of the spring crop is in the ground, compared with a five-year average of 15% for the time of year, according to the USDA.
However, over the past few days, fears of planting delays have receded due to short-term forecasts of ideal dry, warm conditions in the cornbelt.
As a result, maize prices have dropped abruptly this week. The Chicago May futures contract settled on Tuesday (27 April), at 215.3¢/bushel, down from 214.0¢/bushel a week ago but unchanged from mid-April.