August 05, 2014

05/08/2014: Potential abundance of new crop grain keeping lid on prices

There is good news and bad news for grain growers in terms of prices according to Macquarie Bank grains analyst Chris Gadd.

Speaking at last week’s Australian Grains Industry Conference (AGIC), London-based Mr Gadd said in the short-term, grain prices were likely to be under pressure, with good crops throughout the northern hemisphere, but he added it was likely to be a blip on the horizon, with solid prospects across all grain commodities in the medium to long-term.

“You’ve got a situation in the US where a good corn seeding period has coupled in with a good growing season for the first time in several years," he said.

“That has meant there is excellent potential, the eastern corn belt is about as good as it can possibly be, while the western zone is also looking good.”

He said the potential abundance of new crop grain was keeping a lid on prices in the near term.

In the immediate future, Mr Gadd said the oilseeds complex had the most scope for improvement, primarily on the back of soybean numbers.

“The situation there in terms of stocks is much tighter.”

Moving forward, Mr Gadd said forecasting was not so easy, but he generally saw a bright future for grain producers.

“The population growth part of the equation is relatively easy to predict, but it's trying to figure out the impact the dietary shift in nations with an emerging middle class will have.”

Read more HERE.

The Global Miller
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