World: Grains and oilseeds futures and physical prices sharply down in March
In March price levels - futures and physical prices - of grains and oilseeds came down sharply, driven by aggressive competition after record crops of wheat and barley in Australia, also corn and soybean crops in Brazil and Argentina, H. M. Gauger GmbH reported earlier this month.
The IGC reports the following combined Argentina/Brazil crop numbers: corn 132 vs. 96 mln tonnes last year; soybeans 168 vs. 153 mln tonnes a year ago.
U.S. grains/beans have been competitive during the past months, export shipments are well ahead (36% for wheat and 50% for corn) of last year, but will likely drop sharply against the South American and East/West European competition in the months to come. U.S. farmers adjusted their planting programs to the world market situation and their own production costs. This year’s areas are: wheat and corn minus 1.5/1.6 mln ha, soybeans plus 2.4 mln ha y/y.
New crop prospects in the Northern Hemisphere are favourable, winter damage was minimal, particularly in Europe spring is very early, winter grains resumed growth earlier and spring planting is well ahead of former years.
At this time it looks like another year of large supplies and depressed price levels of all grains and oilseeds. Grain production has become unrewarding for farmers in the U.S. and Western Europe, but is still attractive enough in a number of weak currency countries.
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