By Joanna Levin
US farmers and commentators continue to be stunned at the collapse in the maize market, and no one is daring to predict how far prices will fall.
Values have hit a 10-year low with market participants expecting worse. As with other US grains, maize has been hit by the turmoil in world financial markets and fears of a global recession.
In addition to low prices, the market is saddled with high carry-over stocks and the prospect of a record harvest this year. Already 81% of this seasons maize crop is setting pods, ahead of the 77% at this time last year and a five-year average of 67%.
Due to the good weather experienced this season, 68% of the maize crop is rated good or excellent according to a recent US Department of Agriculture survey. Insufficient storage space in the mid-west is forcing some producers to sell.
Exports are poor, and are expected to deteriorate further but analysts suggest that the impact of the Chinese floods has been overrated.
On the Chicago Board of Trade, the September futures closed on Wednesday (August 26) at 198.25¢/ bushel, down 5.25¢ from the previous day. This was down from around 210¢ a week earlier and 290¢ in mid-March.