World: Grain and oilseed markets extremely firm at present
World grain and oilseed markets are extremely firm; wild swings of futures markets stopped the uptrend only for short periods. It started with and continues with the insatiable Chinese demand for all food and feedstuff, H. M. Gauger GmbH reported earlier in February.
Firm markets are supposed to ration demand, which this time has not happened yet. Higher price levels of raw material have caused inflated prices of food and edible oil in the retail sector of several countries of the world. Russia answered the problem with (so far inefficient) export quotas and export taxes, Ukraine and Argentina are discussing such measures, and a number of countries have lowered their import taxes to keep domestic food prices low.
As China has already purchased large quantities of grains for the second half of 2021, it looks like another “demand bull” year 2021/22, the Gauger analysts said.
For the first time in years the grain industry sees a possible supply gap of soybeans and corn by Sept/Oct of this year, when U.S. supplies are depleted and new crops are not available yet.
Other market factors - corona, ASF, weather, crop sizes and qualities - can become of utmost importance at times of short supplies. At present world weather luckily is more beneficial than threatening, and average crop prospects are good.
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