By Paul Willows
What goes up must come down. Global grain and oilseed prices were under pressure again this week as macroeconomic traders continued to liquidate their long positions believing the world is headed for a recession and demand will be significantly reduced. This sell off goes against what we are observing fundamentally - that is demand continues to outstrip supply. The US Government told us last week that despite two years of record high prices- farmers have not put any additional land into growing crops- with total land planted to arable crops falling around one percent. The war continues in Ukraine limiting grain exports. Russians are now dealing with inflation running at twenty percent and a historical high currency – neither of which encourage farmers to sell nor exports to accelerate as harvest approaches. Seasonally prices decline in July and August as the Northern Hemisphere harvest gets underway and farmers sell. China remains the largest swing factor on the demand side and so far, they have been relatively quiet. Prices will remain volatile given so much uncertainty.