Maize prices rose 12% from Jun as crop faced lower acreage
The maize market has witnessed a significant rally in the past month, as the crop faced lower acreage and rainfall deficit in the major producing states of Maharashtra, Telangana and Karnataka. The kharif sowing of maize was lagging behind the normal area by 38.8%, as per the latest data. The possibility of an El Nino event developing during the peak monsoon season also added to the bullish sentiment. However, the market may see some correction in the near term, as the monsoon has improved in the deficient regions and the sowing pace may pick up. Moreover, the global maize supply is expected to be ample in the next season, with a higher stock-to-use ratio of 11.1%.
This month’s 2023/24 U.S. corn outlook is for fractionally higher supplies and ending stocks. Corn beginning stocks are lowered 50 million bushels, as greater feed and residual use for 2022/23 more than offsets reductions in corn used for ethanol and exports. Corn production for 2023/24 is forecast up 55 million bushels as greater planted and harvested area from the June 30 Acreage report is partially offset by a 4.0-bushel reduction in yield to 177.5 bushels per acre.
On the technical front, the prices are trading near a strong resistance level of 2060, and a break above that could open up further upside towards 2140. On the downside, the immediate support is seen at 1920, followed by 1800.
