The macroeconomic environment continued to deteriorate this week with some small regional US banks going broke and China failing to deliver any strong policy response to their slowing economy.
The lack of clear and decisive action on the economy from President XI is likely to have a greater impact on global commodity prices than any other factor.
While the global economy slows and people to spend less- everyone will still need to eat – including China.
The drought in Argentina is the worst in 30 years but has been compensated for by record crops in Brazil. The attention of grain merchants now will quickly shift toward weather for maturing US winter wheat crops.
Will the US farmer finally respond to higher prices and plant more area to corn and soybeans this year? Global balance sheets are very tight on paper- so the world needs the US farmer to respond.
We have been reducing global stocks of all grains and oilseeds for the past three years. Perhaps this is the year we can start to rebuild stocks ?
Local harvest continues at very slow pace. Most of the winter crops have been harvested and put away- now for the spring sown crop.
Let’s hope the weather remains kind and allows farmers to get their crop into storage.