Global Grain: What Next?
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The world’s wheat market remains in a bearish mindset with record supplies. However, quality problems, or concerns about quality problems, in some of the biggest exporters have injected a more bullish tone to some sections of the market.
“World wheat export prices continued to have a generally weak tone during September, pressured by record global supplies,” the International Grains Council (IGC) said in its Grain Market Report. “However, with uncertainty about quality problems in harvests spreading to more areas, including Canada and Australia, market sentiment was comparatively more bullish for higher grade milling wheats.”
As for rice, we’ve seen a record year of rice production in 2016-17, which will exceed consumption, triggering a rise in stocks. Prices around the world have fallen.
Global oilseed prices have been pushed up as a result of concerns over the U.S. weather, against the background of an already tight market.
“Global soybean markets advanced sharply in June, the IGC GOI sub-index rising by 13%,” the International Grains Council (IGC) said in its Grain Market Report in July. “U.S. futures were underpinned by firm export demand, partly linked to tighter than anticipated supplies at South American origins.”
Overall, world grains production will break records again this year. Although usage also is expected to rise, ending stocks will be higher and export availabilities will be ample.
“A positive outlook for global cereal production in 2016, together with abundant stocks, points to a generally comfortable supply and demand balance in 2016-17,” the Food and Agriculture Organization (FAO) said in a Cereal Supply and Demand Brief issued Oct. 6.
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