An update to new crop maize
Maize usage in compound and IPU feed production increased by 82.9% in the season to Apr-19: The latest feed usage statistics show a decrease of 0.7% in pig feed production in the season to date.
The US is currently in the middle of its slowest maize planting season since records began in 1980. Consistent heavy rainfall across the Mid-West has left large soya and corn acreages unsuitable for fieldwork. Planting progress is currently at 67% (02 June), way below the 5 year average of 96% for this period. Soyabean plantings are also behind with progress at 39% planted (02 June), with the 5 year average at 79%.
A reduced US crop area supports global maize and soya prices. New crop US maize futures (Dec-19) rose $24.70/t (30th April – 31st May) as the threat of a reduced area grew increasingly likely. This filtered through to EU new crop maize futures (Nov-19), which rose €8.00/t in the same period. Expectations of a large Ukraine and South American harvest prevented increases rising further.
However, global trade of coarse grains is expected to fall by 1.4%, according to the latest FAO outlook. Much of the decrease is a forecast reduced maize import demand, particularly from the EU and China. Chinese imports of maize and soya are likely to decline, given the reductions to its pork herd. Lower demand from China may also help to stem any upward price pressure.
How the maize market balances will be important for feed prices and composition this year. Maize usage in compound and IPU feed production increased by 82.9% in the season to Apr-19: The latest feed usage statistics show a decrease of 0.7% in pig feed production in the season to date. Domestic feed prices have been relatively high this past season with last year’s summer drought affecting forage quality. If maize prices are higher this year, this could mean ration inclusion rates reduce.
Of course, this will also depend on developments in other cereal markets, particularly wheat. Crop issues in maize will have a knock-on effect on prices for other cereals. The EU and Russia are anticipating large wheat crops this year, which could mitigate any upward pressure. UK new crop barley and wheat are both looking favourable currently. Nonetheless, assuming summer conditions remain more encouraging this year, feed prices could be expected to remain below last year’s highs.