Geopolitics once again impacting grain markets
The latest USDA WASDE report and continued competitive Black Sea prices were contributing factors, whilst grains have also come under pressure from geopolitical developments, including an announcement that China will review the anti-dumping measures it had placed on Australian barley in 2020, said the analysts.
If barriers are lifted, French barley would have to compete against cheaper Australian supplies for Chinese demand, which could in turn drive down European prices, noted an AHDB report on the development.
Additionally, Morocco, which has been suffering from severe drought, has adjusted import subsidies for Black Sea cargoes making them more competitive with European shipments, added the CRM Agri team.
China’s soy imports
Meanwhile, China's agriculture ministry again stressed the need to cut back on soymeal inclusion levels in animal feed.
The legislators, reported Reuters, issued a three-year action plan this week, proposing soymeal ratios in animal feed of less than 13% by 2025, from 14.5% in 2022.
Chinese officials previously published guidance in 2021, directed at the domestic feed industry, recommending lower soymeal inclusion levels, and January this year saw Rabobank release an outlook forecasting that China’s soybean imports would slow down and eventually decline through to 2030.
The policymakers are looking to reduce soybean imports and boost domestic food security taking account of geopolitical risks.
As US producer price inflation data unexpectedly fell last month, by 0.5%, there are ongoing expectations that the upward cycle in US interest rates is near its end, according to CRM Agri's big picture outlook.
While a softer dollar is in theory supportive for values of dollar-denominated commodities, making them more affordable to buyers in other currencies, ag trade data for last week showed US wheat export sales at modest levels, found the grain and oilseed market experts.
US corn export sales for last week, at 528Kt, were at the lower end of market forecasts as well, they reported.
US soybean export sales last week, at 365Kt, were around the middle of the range of market expectations, and at a four-week high.