After two months of a sharp decline in prices, driven by strong competition from South American countries and the beginning of the harvesting season, US maize prices have started to rise from the 2nd week of September. This price rise follows anticipations of lower yields and ending stocks for 2019/20, which resulted in Mintec maize prices rising 4% between September 11th and September 25th. This maize price increase was further supported by the release of the USDA’s latest grain stocks report at the end of September, indicating lower stockpiles for this marketing year.
US maize stocks are forecast to reduce by 6.5m tonnes (-10.4%) compared to the previous year, mostly due to smaller yields as a result of severe delays in maize sowing, caused by extreme wet conditions during spring. As a result, US maize production is forecast at 350.5m tonnes, down 4.3% y-o-y.
According to the USDA, US maize crop progress is at good conditions. However, the weather forecast of wet conditions for the next month in the mid-west region is likely to delay maize harvesting, and potentially affect the crop’s quality. Therefore, this is likely to support a bullish trend for US maize prices.