Figures from the first USDA report for 2013 says that US use of maize in feed in 2012/13 is estimated almost 8Mt higher than the December forecast to 113.04Mt, indicating that demand rationing has been less apparent than forecasters had anticipated.

This widens the supply and demand deficit for US maize causing a stock drawdown of almost 10Mt this season with end stocks forecasted at 15.3Mt. This represents just three weeks of supply and so timing of the 2013 US maize harvest will be critical to the global feed grain market.

AHDB/HGCA Senior Analysts Jack Watts said: "US winter wheat plantings for harvest 2013 were estimated at almost 17M ha, the highest since harvest 2009, but below some commercial expectations. Historically, this is a relatively low US winter wheat area as the crop has lost land to more profitable, higher yielding maize and soyabeans. In the context of the ongoing US drought it is too early to draw any firm conclusions from US wheat area data as there is a long way to go until the 2013 harvest by which time the level of crop abandonment and yield have to be determined.

"The recent decline in US wheat prices has come in response to poor export progress. The decline may stimulate exports, but there is a question mark over how much international demand remains this season. This decline has also made it relatively 'cheap' against US maize and may encourage increased feeding of wheat in the US. If this persists this season it may deplete US wheat stocks, which in fact  are in reasonable abundance. However over the coming months with many of the US growing regions in drought, the market will have to weigh up the importance of these stocks and whether the price needs to rise relative to maize to preserve stocks going into the 2013/14 season.

"The new release time of the USDA at 5pm UK time, puts information into the market place while US futures markets are open, but while European markets are closed. As a result there is a delay in European markets responding to USDA information, which at times, can be highly influential of prices."

For more on the USDA report view the latest Market Report here.


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