Coarse grains

by World Grain Staff
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With the arrival of the spring season in the Northern Hemisphere, the grain industry annually turns its attention to plantings and prospects for maize, the world’s major coarse grain crop. This year, many uncertainties persisted more than a month into the season, particularly in the United States (U.S.), the largest maize producing country.

In late March, the U.S. Department of Agriculture (USDA) forecast U.S. 2009-10 maize plantings at 34 million hectares. This would represent a decrease in area of about 1% from 2008-09 but still the third largest since 1949.

In the heart of the U.S. "Corn Belt," the early spring weather was cool and very wet. As a result, U.S. maize plantings as of mid-April were running behind the average pace.

The USDA reported that as of April 12, 2% of the maize crop had been sown in the 18 states accounting for the bulk of production, compared with the five-year average for the date of 6%. In the two biggest producing states, Iowa and Illinois, plantings stood at zero, compared with the averages of 1% and 7%, respectively.

Although planting was behind as of that date, time remained for maize sowing if weather conditions improved. But even without any weather delays, U.S. maize growers this season have taken a hard look at planting soybeans outside their normal crop rotation patterns.

Soybean production costs are lower than maize costs, and the two crops typically compete for area based on price relationships. This year, uncertain economic conditions and tight credit may give lowercost soybeans an extra advantage, analysts say.

Soybeans also got a boost over maize when the USDA sharply reduced projected U.S. soybean stocks. Because of record U.S. soybean exports, 2008-09 ending stocks are poised to drop to a historically tight 20-day supply.

Soybean prices initially rallied on that news and then stabilized, while maize prices lagged. Analysts said if November soybean futures reached $9.75 per bushel ($358 per tonne), growers would seek to increase soybean area.

Planting prospects in other key countries are mixed, according to the International Grains Council (IGC). In a recent report, the Council estimated 2009-10 total global maize plantings at 153 million hectares, only marginally higher than the previous season, but still the second largest on record.

The IGC expects 2009-10 plantings to increase in Argentina, China, India, Mexico and South Africa. The Council forecasts reductions in the European Union (E.U.) and the CIS.

Because of low domestic prices, maize plantings in the E.U. should fall by 1.1%, to 8.8 million hectares, the Council said, with reductions in Germany, France, Greece and Hungary. Rains in March replenished soil moisture in all major producing areas.

In Russia, where last year’s maize area was a record, plantings are forecast to drop because of the high cost of inputs. And Ukraine, severely affected by the economic crisis, is likely to see a big fall in maize output, the Council said.

China’s maize area is forecast to rise to 29.2 million hectares from 29 million in 2008-09. Government support measures such as higher guaranteed producer prices should encourage more plantings, as should the crop’s greater profitability relative to soybeans.

The Council projected 2009-10 world maize production to decline to 775 million tonnes, down 1% from 782 million in 2008-09, based on lower yields, still the third highest ever. U.S. production, using the USDA plantings intention figure of 34 million hectares, is pegged at 315 million tonnes, up 8 million from 2008-09, as yields are expected to increase.

In China, however, the Council forecasts a decline to 155 million tonnes from 165.5 million, as last season’s record yields are unlikely to be matched. A yield decline to average should shave 2009-10 E.U. production by about 4.6% from the previous season, to 60 million tonnes.

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