The grain markets continue to be more concerned about geopolitical issues than the planting forecast, but there are pitfalls in both arenas, said Don Roose, president of U.S. Commodities in Des Moines.
Posted on April, 25, 2024 at 09:06 am
The grain markets continue to be more concerned about geopolitical issues than the planting forecast, but there are pitfalls in both arenas, said Don Roose, president of U.S. Commodities in Des Moines.
Appropriations to Israel and Ukraine this past week give the countries the potential ability to be more powerfully offensive or defensive, Roose said, which will be of special concern to Russia and Iran.
There is currently dry weather in Russia, and the Brazilian crop of corn and soybeans is not certain at this point, Roose said.
Price Futures Group analyst Jack Scoville wrote in a blog post that exports have remained weak on competition from Russia, Ukraine and the EU as those countries look to export a lot of wheat.
“Black Sea offers are still plentiful, but Russia has been bombing Ukraine again, and shipments might be hurt from that origin,” he said.
The problems with Russian wheat exporters continue but are apparently getting resolved in the government’s favor, Scoville said.
“The reports indicate that the government is seeking more control of the exports and has made it difficult on the private exporters in an effort to extract more sales and powers to the government,” Scoville said.
He said Russia is the world’s largest exporter and sets the world price, and prices remain low. South American production estimates were little changed.
“It is very expensive to plant corn, and corn is considered unprofitable to plant right now, so planted area might not increase that much if at all,” Scoville said.
Scoville also noted China has been a very active buyer of Brazilian soybeans this season.
“Ideas that South American production is taking demand from the U.S. have pressured futures lower,” he said.
The export pace is expected to continue to improve, but this is part of the price. Stronger world petroleum prices have affected world vegetable oil prices as well. Domestic biofuels demand is likely to improve, Scoville said.
In the latest weekly USDA Crop Progress report, U.S. corn planting is proceeding slowly.
Source: Agupdate