By Joanna Levin
PREDICTIONS of a good harvest and expectations of a drop in exports has restricted US maize prices to a five-year low.
US Government reports forecast one of the largest domestic crops ever. Better weather is helping maintain the maize yield forecast at 120-160 bushels/acre in Ohio and eastern Indiana.
An influential Mid-West crop inspection has further confirmed a healthy maize yield. The inspection tour, organized by farmers representatives and the news service Pro Farmer, has the clout to move the futures market in Chicago.
On the Chicago Board of Trade, the September futures contract closed yesterday (Wednesday) at 209.75¢/bushel, up 1¢ from the previous day but down from about 215¢ early last week.
On the demand side, the international arena is hurting export prospects amid fears that the economic crises in Asia and Russia could hit overseas US maize sales.
The weakness in global financial markets is also having a negative impact on grain commodities. But floods in China could cut Chinas rice production by around 9% this year and this could boost demand for other grains.