By Joanna Newman
US maize prices continue to hold their ground , despite weakness in soya beans and wheat.
Improving supply/demand fundamentals for maize are lending their support to the market.
Both this year and next, American farmers are widely expected to plant less maize, a view that was confirmed again this week by the latest long-term US Department of Agiculture (USDA) projections.
Maize acreage is forecast to shrink to 78.5 million acres in the year 2000 from the 80.2 million to planted this spring.
As a result, production will drop to 9.5 billion bushels from an estimated 9.8 billion in 1999.
Analysts and politicians are quick to point out that the distortions of federal subsidy programmes are luring farmers to switch from maize to soya beans, even though oversupply has driven bean prices to a 23-year low.
Meanwhile on the demand side, a satisfactory volume of maize is leaving the USA for foreign markets. The latest export data shows that 29.9 million bushels of maize were inspected for export in the week ended 18 February, in line with expectations.
At home, more store cattle are entering the nations feedlots, resulting in higher demand for feed grain rations, especially maize.
The monthly Cattle on Feed report points to an 11% annual rise in the number of head placed in feedlots during the month of January to 1.92 million, well ahead of analyst estimates.
Helped by this weeks bullish data, the Chicago March futures shrugged off losses in other grains and closed on Tuesday (23 February), at 215.0¢/bushel, up from 214.0¢ a week ago.