“With inventories of over 150Mt and lower maize demand from China, this is potentially bearish for international feed grain prices,” said Brenda Mullan, acting senior analyst with the market intelligence unit at the Home Grown Cereals Authority (HGCA), part of the UK’s Agriculture and Horticulture Development Board.
Citing early forecasts from the China National Grain and Oils Information Centre (CNGOIC), Mullan said Chinese maize production is expected to hit 232Mt in the next year.
“The 8% growth in production is anticipated to more than outweigh domestic consumption growth of 2.4%,” added the analyst.
She said such data would suggest that the high price and stockpiling policies by the Chinese government has had the desired impact of encouraging more maize to be planted – but has kept domestic prices some 30% above world levels.
She said this means maize imports to China will have to be closely regulated but the situation “has opened the door for alternative feed grains such as sorghum and, more importantly, barley."
US maize crop
On top of the heaviness that the Chinese maize position is putting on global markets, growing conditions for US maize are currently said to benefitting from ‘ideal crop weather’ although there remains a long way to go, said Mullan.
The USDA planting intentions report put the maize area for the 2015 harvest 1.5% lower than last year, with a small swing towards soybean cultivation. The crop progress report as at 3 May shows US maize sowings well ahead of last year and the previous five-year average, reports the HGCA.
In terms of current spot market trends in maize prices, Mullan said they appear to be undergoing a period of near term pressure.
The grain market specialist expects more insight into the potential availability of global maize following the release of that US agency's world supply and demand estimates tomorrow.