top of page

27 June, Grain Comment

Global grain and oilseed markets got slammed last week as funds rushed to liquidate their longs positions with a deteriorating macro-economic outlook. Rising interest rates and a slowing economy could have a negative impact on demand.


Grain merchants would disagree with this view- with historical data suggesting that food commodity demand is impacted very little by a slowing economy. It can be argued that the demand profile of many agricultural products has dramatically changed over the past five years – with large amounts of corn and oilseeds being used as a source of fuel- and not just food.


Canola prices in Europe and Canada have declined more than twenty percent from their highs, which is difficult to justify from a fundamental perspective given the Canadian crop has only been planted and we still have the US corn pollination window ahead of us. The US Government will release an important update on supply and demand next week- which could reverse the current negative sentiment.










Comments


bottom of page