World Grain - July 2019 - 24

FEATURE

IGC Conference examines three factors impacting the global grain and oilseed markets
by Arvin Donley
Delegates at the
International
Grains Council
Conference in
London, England, listen to a
speaker during
the opening
session. Photos
by Arvin Donley.

fter a multi-year period in which global grain
and oilseed stocks ballooned to record highs due
to little disruption in output, the market is suddenly facing some adversity on the production side as
well as ongoing disputes that are disrupting traditional
patterns of trade.
An unprecedented wet spring in the Corn Belt of the
United States has left nearly 7 million acres of corn
unplanted, forcing farmers to decide whether to instead
plant soybeans or some other crop or collect crop insurance. Meanwhile, the now yearlong U.S.-China trade
war that has effectively halted U.S. soybean exports
to China, as well as Britain's impending exit from the
European Union, known as Brexit, are adding uncertainty to once stable markets.
Speakers at this year's International Grains Council
Conference in London, England, addressed these issues at length as well as guaging the impact that the
fast-spreading African swine fever (ASF), which is
plaguing China's pig population and threatening other
regions, will have on the global grain and feed markets.
Robert Johansson, chief economist for the U.S.
Department of Agriculture, told delegates at the conference, held June 11-12, the reduction in corn production
in the United States would have a ripple effect on the
rest of the world.
"It opens up an opportunity for southern hemisphere
producers, for example," he said. "We know Brazil is

harvesting a record corn crop and looking to expand
acres this coming year both in corn and soybeans and is
seeing a premium for exports to China."
He added that rising prices and tightening supplies
could incentivize more wheat production in Ukraine
and other parts of Eastern Europe.
"Ukraine, Russia and Kazakhstan are an increasing presence in the global grain markets, and they are
poised for record production this year," Johansson said.
From a U.S. perspective, Johansson said the strengthening dollar is weighing on its ability to export agricultural commodities. The global economy also is weighing on the global grain and oilseed sector.
"The International Monetary Fund's most recent
forecast calls for slower global economic growth,"
Johansson said. "That will translate into lower demand
for agricultural products."
GRAIN MARKET 'WILDCARDS'
Stefan Vogel, head of commodities for Rabobank,
U.K., discussed three "wildcards" that will impact the
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was relations between the United States and China, the
world's two biggest economic superpowers.
He said the mercurial nature of the trade talks and
U.S. President Donald Trump's penchant for expressing his optimism or pessimism about the negotiations
via twitter breeds uncertainty in the market.
July 2019 / World Grain / www.World-Grain.com

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World Grain - July 2019

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