WANDILE SIHLOBO: Grains and oilseeds prices hold firm on weather concerns despite glut
US agriculture department paints a positive picture of 2021/2022 global production with increased estimates
The global grains and oilseeds production headline numbers paint a picture of a world that is awash with supplies, yet prices have not fallen in anticipation of bumper harvests. The explanations for this range from dryness in parts of South America in the past few months, which affected the crop the region is harvesting, to other weather-related concerns in Europe and the North Americas, where plantings for the new season of 2021/2022 are nearing completion.
Another critical issue is that global grains and oilseeds stocks are low, as consumption from China and other industrial users has remained strong over the past few years. Maize is a good case in point. Lower stocks are a catalyst for the knee-jerk reactions in prices whenever there is news of unfavourable weather conditions in major grains and oilseeds-producing countries. Such price fluctuations occur even if the weather-related news has minimal impact on actual crop conditions...
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