Spotlight on the US maize market

• Today the focus will be on the US maize market ahead of the weekly crop progress data which is due for release in the evening. In the week of 13 May 2018, about 62 percent of the maize area for this season had already been planted. This, however, is slightly behind last year’s pace of 68 percent in the corresponding period.
• Moreover, about 28 percent 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 USDA forecasts the US 2018/19 maize production at 357 million tonnes, down by 4 percent 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 tonnes, also weighed down by similar factors as the USDA.
• The global picture is in good shape. The International Grains Council forecasts 2018/19 global maize production at 1.05 billion tonnes, 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 tonnes, well above annual consumption of 10.7 million tonnes. Therefore, the SAFEX maize prices could possibly remain at relatively lower levels for some time. 

 Read the full report by Wandile Sihlobo in the attachment below:

Agbiz Morning Market Viewpoint on Agri-Commodities 21 May 2018