By Joanna Levin
THE maize market is extremely sensitive to the outlook for precipitation as farmers complete their spring planting.
So far, there has been little to disturb the supply picture, with farmers already 78% completed in their planting, compared with a five-year average of 63%. The six- to ten-day weather forecast shows perfect planting conditions in the midwest, so farmers are likely to finish planting well ahead of schedule.
While most traders are bearish on corn because of the severe structural oversupply in the market, some analysts are predicting a drought in July or August, the La Niña sequel to El Niño. This would hurt the crop around harvest time and lead to a rally in prices.
On the demand side, the latest export figures show an encouraging pick-up in maize shipments. Export sales during the week ended 14 May rose 33.4 million bushels to 1235.1 million bushels. The USA is gaining business at the expense of Argentina, as the South Americans are unwilling to discount sales while having difficulty meeting current commitments.
The Chicago July futures contract closed at $2.4725/bushel, up 1¢ on the week, while the December contract was unchanged at $2.5925.