Helen Plant, senior analyst at the UK’s Agriculture and Horticulture Development Board (AHDB) market intelligence division, said projected plantings by US maize farmers for this year, released by the US Department of Agriculture (USDA) at the end of March, were higher than expected.
“It was quite a bit up. Maize is the big feed grain globally. A larger US maize planted area, forecast to be 6% higher than last year, would put pressure on prices for that grain globally and take wheat prices down with them,” she told FeedNavigator.
She reported that, after falling since the start of 2016, in late February old crop UK feed wheat futures values dipped to the level of US maize prices futures, and had since stabilized due to currency fluctuations.
“But the USDA maize planting news gives a kind of heads up on potential crop expansion, feeding into market sentiment and a downward price curve,” said Plant.
Moreover, she said, the global maize market has less of a stocks cushion than the global wheat market, meaning there is more dependence on the 2016/17 crops and the market is potentially more prone to volatility.
“That said, often it is more about yield than planted acreage when it comes to US maize. Yields have a greater influence on final US maize output,” said Plant.
Black Sea wheat
Meanwhile, she said there remains a certain amount of uncertainty over Black Sea wheat production next season.
Plant said data released this week by Ukrainian officials indicate the wheat crop in that country will be 17mt, down 35% from 2015/16.
Plant’s colleague, ADHB analyst, Arthur Marshall, said this forecast is based on losing 20% of the winter wheat planted area due to insufficient snow cover over winter.
“Although UkrAgroConsult are forecasting slightly higher production at 18.5Mt due to favorable spring weather, this is still far below this season’s 26.5Mt,” said Marshall.
Meanwhile, he said the Russian consultancy, SovEcon, has forecast Russia’s crop at 57Mt from 62Mt this season.
“Russian wheat production is more dependent on spring wheat than its neighbor; SovEcon’s 57Mt forecast is based on weather forecasts for April and May, as well as spring planting intentions,” noted Marshall.
Cold weather forecast for these months is expected to result in some growers reducing the spring wheat area they sow, he said.