USDA report damps down maize prices

By Joanna Levin

US corn (maize) prices extended their losses early last week, picked up ahead of a Government crop report released on 12 August, and then subsided again into negative territory.

The Chicago September futures price has declined steadily from a recent peak of 265¢/bushel in mid-June to a contract low of 210¢/bushel around 6 August. Favourable weather conditions throughout the growing season so far have helped to drive prices ever lower. Early last week, traders reacted bearishly to yet more news of ideal weather as the corn-belt enjoyed some timely precipitation.

However, position-squaring ahead of the 12 August release of a key US Department of Agriculture monthly Crop Production and Supply & Demand Estimates helped to firm up the corn market 7-11 August. The Chicago September futures contract climbed to 214¢on Monday (11 August).

The long-awaited crop report was neutral to bearish for corn and prices quickly retreated again. The September futures contract closed yesterday (12 August) at 209.25¢/bushel, down 4.75¢ from Tuesday.

The USDA estimates a 1998 US corn crop of 9.592 billion bushels, down from a July estimate of 9.625 bn bushels. This represents a 2% increase from last year and a 3% increase from 1996. At the same time, the USDA has raised its yield estimate to 130.0 bushels/acre, well ahead of the 127 bushels/acre achieved last year.