US maize supply 2013/14 in the focus of pricing
Despite the lack of market reports from the closed US Department of Agriculture (USDA), it is estimated in market circles that one third of the US corn harvest has been harvested, while 50% of the soybeans have been threshed.
The information on the threshing results remains selective individual information, the representativeness of which cannot be verified at present. There is a tendency towards a higher estimate of yields per hectare than was used as a basis in the last USDA report at the beginning of September 2013.
There is also a lack of definitive figures on harvested areas, which must be used as a basis for the harvest estimate.
In addition to the uncertainty on the supply side, there are new irritations on the use side. Under the guise of a lack of government controls on exports, rumors are swirling that the Chinese have made unusually large purchases of corn and soybeans. Although the current lack of information from the state monitoring authority does not affect current prices, these export volumes will lead to price corrections in a later balance sheet.
In the maize sector, considerations regarding the volume control of bioethanol production are unsettling pricing. The responsible authorities are discussing upper limits for production from various raw materials. Priority is to be given to the use of alternative raw materials that are not in direct competition with food and animal feed. This could - but does not have to - reduce the current use of maize. A resolution has not yet been passed.
The combination of the expected record US harvest and a possible decline in domestic consumption of maize is leading to speculation of further pressure on maize prices below $4 per bu (€11.50/dt). However, this is currently being countered by unresolved US maize exports and the price-driving shortage on the global wheat market.
The imminent temporary end of the shutdown in the USA could, after a phase of catching up, provide more concrete guidance for market and price developments. Surprise effects and price turbulence may also be expected in the meantime if the official data does not match the assessments of market participants.
