North American arable roundup 05 November
US maize — Russia aid hype recedes post-election
IT has been a quiet week in the US maize market, with prices inching lower in recent days.
The Chicago December futures contract settled on Tuesday, 3 November at 216.75¢/bushel, down from 219.0¢ a week ago.
The anticipated announcement of US maize shipments to Russia has failed to materialise. With US elections over, there is little incentive for the US Government to rush through a deal to demonstrate its concern for Americas struggling farmers.
There are reports that US food aid negotiations with Russia are hitting some problems and this could cause further delays.
Back in America, the harvest is almost completed ahead of schedule. So far 83% of the crop has been gathered, compared with a five-year average of 68% at this time of the year.
The Loan Deficiency Payment (LDP) Government subsidies have enabled farmers to withhold most of their new-crop maize from the market for the time being. This has helped support short-term prices but will create an overhang of supply in the future.
HOPES that the US Government would make a gesture to boost wheat prices ahead of this weeks elections proved unfounded.
The market had been expecting an announcement of immediate wheat shipments to Russia. This which would have helped alleviate the severe oversupply situation in the US and thereby raised market prices for farmers.
However, USDepartment of Agriculture negotiations for Russian food aid have apparently become bogged down and could drag on for months. Now that elections are out of the way, there is little incentive for the USDA hurry.
Other Governments are also likely to be competing with offers of grain donations to Russia to help their own domestic oversupply problems.
Meanwhile the domestic winter wheat crop is already almost completely in the ground thanks to good weather conditions and this is further depressing prices.
Farmers have planted 90% of their crop, in line with the five-year average of 91%. The Chicago December futures contract closed on Tuesday, 3 November at 287.5¢/bushel, down from 295.2¢ a week ago.
THE soya-bean market has shown little movement over the past week.
Prices managed to firm up towards the end of last week on news of a higher than expected weekly export total of 22.4 million bushels for the week ended 22 October, up from 9.9 million bushels the week before.
However, prices eased off again early this week due to weakness in the wheat market and reports that the soya bean harvest is almost completed.
Farmers have gathered 89% of their bean crop, compared with a five-year average for the time of year of 85%.
Diminishing hopes of a quick US Department of Agriculture food-aid shipment to Russia have also put pressure on the soya-bean market. The Chicago November futures contract closed on Tuesday, 3 November at 550.75¢/bushel, down 2.5¢ from Monday but up from 248¢/bushel a week ago.
The biggest concern for soya bean producers is the collapse in the pig market. With hog prices at a thirty-year low, some hog producers face bankruptcy and this could damage the demand for soya meal.
This fear is not yet reflected in meal prices. The Chicago December meal contract settled on Tuesday 3 November at $141.20/tonne, unchanged from last week.
Pre-election boost fails to materialise in US wheat
Pig-market collapse hits US soya growers