Ample coarse grains supplies and competition for feeds business from wheat have put prices under pressure. Harvesting is under way in the southern hemisphere, with South American production forecast lower on reduced area and South African supply affected by a reduced crop, triggered by adverse weather, and a reduction in opening stocks estimates.

“Reflecting bearish fundamentals and strong competition for business, export prices at the major origins were lower during February,” the International Grains Council (IGC) said of maize (corn) in its Grain Market Report. “With broadly similar declines in the U.S., South America and the Black Sea, the IGC maize sub-Index dropped by 6% to its lowest level in more than four months.”

“Up River basis offers in Argentina were lower on seasonal pressure and favorable crop prospects,” it said. “With weak nearby demand from some large buyers in North Africa and Asia, exporters were also keen to uncover some buying. Export prices were around 6% lower, at U.S.$170 fob. Due to fairly large availabilities and sluggish export demand, Black Sea prices were down by around 7%, at $168 fob.”

Barley was also down. “The IGC GOI barley sub-Index fell by a net 5% during February, with pressure from ample global grain supplies more than offsetting support from firm international demand for feed barley,” the report said. “A favorable outlook for 2015 crops also weighed, with major buyers in Near East Asia and North Africa seen likely to import less in the year ahead.

“Declines were particularly notable in the E.U. (France), under pressure from competition in livestock rations from wheat and a good 2015 production outlook. At U.S.$201 fob (Rouen), feed barley export values were down by $15 month on month, with the decline also partly linked to currency movements.”

Quotations in the Black Sea region weakened by U.S.$9, to U.S.$205 fob, it said.

“In Australia, a weaker local currency weighed on U.S. dollar denominated export quotations, although losses were capped by firm export demand; feed barley export prices declined by $7, to $242 fob (Adelaide).

“Malting barley values were down by U.S.$6, to U.S.$279 fob (Adelaide), as falling beer production in China was seen contributing to weaker third country buying interest,” it said. “Amid sluggish exports, prices in Argentina softened by U.S.$15, to U.S.$200 fob (Up River).”

In its March World Agricultural Supply and Demand Situation Report, the U.S. Department of Agriculture (USDA) cut its figures for coarse grains supply and raised its consumption forecast.

“Global coarse grain supplies for 2014-15 are projected 2.4 million tonnes lower, mostly on reduced corn beginning stocks and production for South Africa. Global coarse grain consumption for 2014-15 is raised 2.7 million tonnes, mostly on higher barley use for China with larger imports and higher millet use for India with larger production.”

It also raised its figure for barley consumption and imports for Iran.

“Partly offsetting the increases in barley imports for China and Iran is a reduction for Saudi Arabia,” it said. “Barley exports are raised for the E.U. and Australia. Corn imports are raised for Saudi Arabia and Israel. In addition to the United States, corn exports are raised for Argentina and Brazil, more than offsetting a reduction for South Africa.”

In its Crop Prospects and Food Situation report, the United Nations Food and Agriculture Organization noted that the season in the Southern Hemisphere is well advanced.

“In South America, coarse grains production in 2015, mostly constituting maize, is forecast to decrease from the above-average output of the previous year but remain at a high level, reflecting lower prices and ample supplies that instigated a decrease in plantings,” it said. “In Brazil, harvesting of the first season maize crop is under way and preliminary forecasts point to a small increase, as higher yields are expected to offset a contraction in the area planted.”

However, a sharp reduction in plantings for the second season is forecast to cause a fall in aggregate production by 3% compared to 2014, it said. “In Argentina, an 11% decrease in plantings is forecast to result in an 8% fall in maize production.”

In Southern Africa, official forecasts are not yet available for all countries. However, preliminary indications point to a decline in the aggregate 2015 maize production from last year’s bumper output.

“In South Africa, the largest producer in the sub-region, maize production is expected to fall sharply by 33% on account of reduced yields. Elsewhere in the sub-region, including in the two second biggest producers, Zambia and Malawi, production is also forecast to decrease, but remain above average,” it said.

Chris Lyddon is World Grain’s European editor. He may be contacted at: chris.lyddon@ntlworld.com.