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14 June 22, Grain Comment

The focus of global grain merchants recently has been on Northern Hemisphere weather and the war in Ukraine.

The weather so far in the US has been benign after a very slow, wet start. With forecasts indicating a hot and dry July for Western areas of the corn belt- making for jumpy markets.

The debate continues regarding supply of grain out of the Black Sea region- so far it looks slow. China appears to have been forgotten by the market, with the COVID-zero policy creating a negative impact on demand.

Vegetable oil imports have plummeted nearly five million tons year on year, a huge drop however a positive is it helps relieve the shortage of vegetable oil globally.

There could be the possibility for China to do something similar on wheat. Last year China imported just over ten million tons of wheat – of which around half came from Australia.

Wheat domestically in China is cheaper than Australia wheat (and world wheat), so perhaps Chinese demand for wheat could be reduced significantly and help solve the shortage created by the war in Ukraine. The Chinese Government continues to import huge amounts of feed grain (corn)- despite the slowdown in demand and negative import margins.

China is on track to import just over fifty million tons of feed grains as the Government looks to restock their reserves.

Local prices have had minimal movement this week.


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