Gloom for US maize forecast
This came as the US Department of Agriculture (USDA) released revised figures on production, which show that maize production in the USA is expected to be 27% lower than was expected two months ago. Production is now expected to be around 274mt, down from a forecast 375mt in June.
This figure is in line with analysts’ prediction, which were considerably lower than the USDA’s July forecast of 329mt. IGC had put the figure at 300mt, with Informa Economics and FC Stone more cautious at 262mt and 279mt respectively.
Jack Watts, senior analyst of the UK’s Agriculture & Horticulture Development Board HGCA (AHDB/HGCA) said: “Early in spring, in response to the strongest plantings since the 1930s, the world was anticipating a recovery in global feed grain supplies. However, the events of the grain situation is likely to get worse rather than better than last year.”
HGCA said that, despite a record amount of maize being planted in the spring (39mha – the most since the 1930s), crop abandonment and falling average yields as a result of the droughts were driving maize production figures. It said that although crop abandonment was below that seen in previous drought years, it has still increased from 7.8% to 9.07%, while the average yield forecast has fallen to 123.4bu/ac (7.73t/ha), a fall of 15.5% from the July estimate.
US maize stocks at the end of the season are expected to be 13.54% lower than forecast in July, at 16.51mt, which is less than 6% of the US demand.
HGCA said: “High prices are already having an impact on demand forecasts, with US feed demand for maize now forecast at 103.51Mt, 12.07Mt below last season. Maize demand from US ethanol producers is forecast at 114.3Mt, 12.7Mt below last season.”
The drought is also impacting US soya bean production, which HGCA says will result in stocks being the lowest since 1964/65 at 3.13mt, which represents only 4.2% of US demand. Production forecast now stands at 73.27mt, the lowest since 2007/8 with yield expected to be 36.1bu/ac (2.42t/ha).
These shortages are having a serious impact on the livestock sector, which is urging the US government to waive the corn ethanol mandate in the Renewable Fuel Standard (RFS) to ease the supply situation.
As a result of lower maize availability in the US, the Ukraine is expected to be a key global supplier for 2012. Ukrainian maize production is forecast to be 21mt, while wheat production rose 2mt to 15mt, due to a better-than-anticipated harvest.
