Maize

Global maize and soybean prices have skyrocketed in recent weeks and experts fear that price increases will be unabated as dry weather in the US Midwest continues for at least another week.

FEWS NET has released its Food Price Watch for June, citing steadily increasing staple food prices in East Africa. Rising prices in the region are being caused by a combination of dwindling supplies from previous harvests and market interruptions due to conflict; many areas of the region were already seeing alarmingly high food prices.

The FAO Global Food Price Index averaged 214 points in April, down 3 points from the previous month. Cereals prices aided this decline with a drop of nearly 2 percent from March and 16 percent from April 2011. Maize prices declined on solid production prospects, while wheat and rice prices also fell marginally. Soybean prices, on the other hand, surged on fears of tightening global supplies.

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The USDA Economic Research Service (ERS) has released its monthly crops outlook. The reports track US and international production, stocks, and trade data for major commodities and agricultural goods. The April reports cite an anticipated reduction in US soybean acreage due to a surge in corn planting; Brazil and Argentina also saw reductions in their estimated soybean production due to drought. These reductions could bring global soybean export levels down by 4 percent.

The FAO Food Price Index for March averages 216 points, virtually unchanged from February's FPI at 215 points. Cereal prices also rose only one point. Low maize inventories and a strong soybean market caused a slight increase in maize prices, but sufficient wheat supplies kept that commodity's prices stable. Overall, only oils/fats prices showed strong growth due to a tightening of the expected 2011/2012 supply and demand balance.

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