According to the recent condition report released by the U.S. Department of Agriculture (USDA) after markets closed, U.S. maize crops are off to an excellent start. In the beginning of June, approximately 75% of the U.S. maize crop was rated to be in good to excellent condition. This initial rating is notably higher than last year's first rating when about 64% was classed as good/excellent, and the average market expectation of nearly around 70% was provided by leading commodity data provider LSEG.

The promising start to the maize season is further bolstered by the planting progress, which remains ahead of the five-year average pace despite recent wet weather conditions. With almost 91% of the anticipated area now planted, expectations are high that U.S. farmers will be able to plant all their intended maize crops. The recent rainfall across key growing areas is expected to support a positive start for the crops, and more rain is forecast for this week.

The agency currently projects that 90 million acres of corn will be planted for the 2024-25 season, with approximately 82.1 million acres expected to be harvested. The yield is forecast at around 181 bushels per acre, with total production estimated at nearly 14.86 billion bushels. Furthermore, the USDA’s Acreage report, set for release at the end of June, will provide survey-based estimates of planted and harvested areas. While the positive start to the U.S. maize crops could temporarily lower global maize prices, the crucial months for determining crop yields are still to come. Weather conditions in July and early August will be critical in determining the final U.S. maize crop yields.

Additionally, harvest results from the 2023/24 Brazilian Safrinha maize crops, which are still facing uncertainties due to earlier heatwaves and recent flooding in some areas, could further impact global maize supply and prices. As of June 2, only about 4% of the Brazilian Safrinha maize crop had been harvested.

While the USDA did not update its yield estimates in this report, it is expected to do so in July, along with releasing quarterly grain stocks and planted area totals on June 28th. The market sentiment suggests that maize acreage may be revised downward from the March estimate, with the key question being the extent of the reduction.

As the growing season progresses, market participants will closely monitor weather conditions, global supply and demand dynamics, and the progress of the U.S. and Brazilian maize crops, all of which will shape the trajectory of maize prices in the coming months.