Today (21 May 2018), the focus will be on the United States (US) maize market ahead of the weekly crop progress data which is due for release in the evening. In the week ending 11 May 2018, about 62% of the maize area for this season had already been planted. This, however, is slightly behind last year’s (2017) pace of 68% in the corresponding period.
Moreover, about 28% of the planted crop had already emerged. Given that the weather conditions have been quite favourable in the past couple of days, today’s data is likely to show improvement on crop emergence. The overall delays in plantings were due to unfavourable weather conditions experienced earlier in the season. The conditions have now improved, with the forecasts for the next two weeks showing a possibility of rainfall over most parts of the Midwest. This should improve soil moisture and subsequently benefit the crop.
The United States Department of Agriculture (USDA) forecasts the US 2018/2019 maize production at 357 million tons, down by 4% from the previous season owing to expected lower yields in some states, as well as a slight decline in area plantings. This is almost in line with the International Grains Council estimate, which is currently at 355 million tons, also weighed down by similar factors as the United States Department of Agriculture.
The global picture is in good shape. The International Grains Council forecasts the 2018/2019 global maize production at 1.05 billion tons, up by a percentage point from the previous year. This is due to expectations of a large harvest in China, Argentina, Brazil and Russia.
Overall, the global maize developments could have minimal impact on the SAFEX maize prices in the near term due to solid local supplies, which are estimated at 16.4 million tons, well above annual consumption of 10.7 million tons. Therefore, the SAFEX maize prices could possibly remain at relatively lower levels for some time. – Wandile Sihlobo, Agbiz
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.