World Grain - June 2016 - 112

FEATURE

T

CHANGED WORLD

here is huge potential for extra production of grains and
oilseeds around the world. Farmers are going to push
crop output higher, especially where currency makes
growing a crop for the world market more attractive than it
might seem to those outside, delegates at the recent Cereals
Europe 2016 Conference in Geneva learned.
Piers Corbyn, astrophysicist and founder of WeatherAction
long-range forecasters, and Scott A. Yuknis, who spoke to
the conference by audio link, owner and founder of Climate
Impact Company, Inc., looked at the impact of weather.
"The weather is not primarily caused by the weather,"
said Corbyn, explaining the long-term cycles which affect it.
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moving the jet stream. Solar activity is moving the jet stream
and we can predict how this is going to happen."
That means he does not believe the climate is being affected
by man-made carbon dioxide.
"The idea of a cooler climate ahead makes sense to me,"
said Scott Yuknis, agreeing with Corbyn's ideas on cycles.
"What we will probably see over the next couple of months
is El Niño certainly weakening. Models point to a weak La
Niña developing toward late season. There will be a lot of
volatility in the weather pattern, coming out of spring and into
the summer season."
William Tierney, chief economist for AgResource Company,
pointed out how the wheat market has changed.
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Pedro Dejneka, managing partner, AGR BRASIL and AGR LATAM, speaks at
the Cereals Europe Conference in Geneva. Photos by Chris Lyddon.
112

by Chris Lyddon

Experts agree prices will remain low
for the foreseeable future as supply
is far greater than demand
wheat crop," he said. "I was in Kansas. The Kansas wheat
crop doesn't matter any longer. The U.S. wheat crop almost
doesn't matter any longer. World wheat stocks will be the
highest in 16 years. Wheat supplies of the major exporters will
be down. That could end up being an incorrect statement if the
upside of production is achieved.
"I think our numbers are responsibly conservative. If we
have a drought this summer and corn that goes to six dollars,
what is going to be the price of wheat? You will not see wheat
prices drop below corn prices. As corn prices fall, it tends to
weaken wheat prices."
The major wild card is what happens in the Black Sea, he
said, noting that Russia's crop is not yet ripe for harvest.
"The Russian wheat crop is uniquely susceptible to
drought," he said. "The impact of weather risk in the former
Soviet Union is exacerbated by policy uncertainty. There does
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Russia's ending stocks-to-use ratio and the August-September
low in Russian wheat prices.
"Russia could intervene in the marketplace if it wanted to
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June 2016 / World Grain / www.World-Grain.com
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World Grain - June 2016

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