Global focus for Grain Market Outlook conference
This year’s AHDB Grain Market Outlook conference, which took place yesterday, emphasised the global nature of today’s agricultural markets. The four speakers all had much to say about global developments and how these impact on the UK markets for cereals and oilseeds.
AHDB Lead Analyst, Jack Watts, spoke about the outlook for grain markets. With a third consecutive strong global harvest, prices are currently low and stocks are plentiful, particularly for wheat. However, he did highlight that some risks remain for maize, where stocks are lower relative to demand, albeit higher than in some recent years. The small number of major producing countries means that weather events can have more of an impact on global maize supplies than is the case for wheat.
The second speaker, Julian McGill from LMC International Ltd looked at the oilseed market and, in particular, its close relationship with crude oil. Falling oil prices had pulled down vegetable oil prices, although there is still potential for further falls. This was likely to lead to some reduction in production for most oilseeds but perhaps not for soyabeans, where demand for meal, notably from China, is a key market driver.
Hamish Smith from Capital Economics looked at the macroeconomic outlook. His view was that concerns about the Chinese economy have been overstated but that the Eurozone recovery was still fragile. He also highlighted how the strong US dollar meant that low commodity prices weren’t necessarily feeding into decision making – highlighting rising soyabean prices in Brazil due to the depreciation of the real.
The final speaker was Dominic Watkins of DWF, who gave an overview of the Transatlantic Trade & Investment Partnership (TTIP). Negotiations between the EU and US continue and may not be concluded before late 2016, with ratification taking longer still. Food and agriculture issues, such as GMOs, growth hormones and food labelling, are among the most challenging elements to be resolved.
Copies of the presentations and videos of the speakers will be available soon through the AHDB Cereals and Oilseeds website.