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Grain Comment, 20 March

The global economy lurched from bad to worse this week as the rapid hike in interest rates continues to impact companies and now regional banks. Retail consumers seem unfazed so far with retail spending in Dec-Feb at close to record highs in many counties, strange times we live in.

Many macro analysts try to imply negative demand growth for grains and oilseeds seeds with a slowing economy, this rarely happens over the medium to longer term. We may see periods of ‘slow demand’ if companies or governments defer demand or slow down purchasing, but this normally results in a ‘catchup’ a few months later.

Despite a slowing economy people still need to eat, case in point is China. China purchased 50 million tons of feed grains in 2021, global prices rallied/ demand slowed due to Covid, imports fell to 26 million tons in 2022. Now they are back and forecast to import over 50 million tons in 2023.

Canola futures have collapsed in Canada as funds have sold aggressively, following the sharp declines in the energy markets. Markets remain volatile, so use the price volatility to lock in your margins where it makes sense.


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