Drought in Argentina, dollar strength and uncertainly on the Black Sea export initiative may push prices up
Chicago — A patchwork of fixes and increased maize plantings around the world to counter the effects of war in Ukraine on global grain supplies are not enough to ward off further risks of disruption.
A year after Russia’s war on major grains producer Ukraine sent global crop values to decade highs on fears of shortages, prices of key crops have reverted to prewar levels, with benchmark corn futures down 10% and wheat futures more than 20% lower than the days before the invasion. Importing nations avoided a worst-case scenario as a record Russian wheat crop that was exempted from sanctions and bumper harvests in Australia and Canada helped to offset sharply reduced Ukrainian wheat shipments. A surge in Brazilian maize production, meanwhile, blunted the impact of lower supplies from Ukraine and a weaker-than-expected harvest in the US, the world’s top exporter of the feed grain.“Luck has played some role in events ...
Global wheat stocks are projected to thin to just more than a three-month supply by the end of the 2022/2023 season, the tightest in eight years, according to US department of agriculture data. Maize stocks were seen at an 81-day supply, down 22% from a recent supply peak six years ago.Global grain merchants and fertiliser makers warned that the world would need multiple good harvests to rebuild supplies.
Rising interest rates and a strong US dollar, which makes dollar-denominated commodities more expensive for buyers holding other currencies, have heightened the risks for importing countries, the IGC’s Karavaytsev said.
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