ANALYST: COMMODITY MARKETS IN THE ‘DOLDRUMS’
Corn futures on the Chicago Board of Trade were down 31% for the year, while wheat contracts fell 21% and soybeans dropped 15%, according to Bloomberg. The drop in 2023 was one of the largest declines since 2013-14, following the 2012 drought, but the reasons for the decline are different this time, Nicholson said. For one, Russia had a near-record wheat crop this year. “And they just keep selling it on the world market,” Nicholson said. “The two big buyers, China and India, are more than willing to buy it and buy it cheap. That’s kind of put the kibosh on the wheat market.” In the corn and soybean markets, a record crop in Brazil and a decent crop in the United States have rebuilt global stocks, which quieted any market concerns.
There are logistics problems all over the world, from low water levels on the Mississippi River and in the Panama Canal to political unrest in the Black Sea and Red Sea regions. “That translates back into cheaper prices because any price appreciation is getting sucked by insurance or freight costs”. Money flow is also a contributing factor, he said, noting that money has come out of commodities and gone back into stocks and bonds. Nicholson foresees a sideways pattern for now, but that will depend on a few factors, including South American production, particularly the Brazilian corn and soybean crop.
(Link: WorldGrain)
BRAZIL SOYBEAN PRODUCTION REVISED LOWER
Although Brazil’s latest soybean production forecast for the 2023-24 marketing year has been revised lower to 158.5 million tonnes, it still would top last year’s record total, if realized, according to a report from FAS. FAS said poor weather resulting from El Niño has lowered expectations for this year’s crop. “Heavy rains over the last two months have delayed sowing pace, risking the most recent seeds planted to miss the ideal weather window for proper plant growth.” In 2023-24, Brazil is forecast to double the United States’ export total (99 million tonnes, compared to 47 million), with most of the exports expected to go to the world’s biggest importer, China.
(Link: WorldGrain)
