By Paul Willows
Global grain markets are caught in the middle of two completely opposite views on the outlook. Fundamental grain merchants are convinced there are less supplies of grains and oilseeds because of the war in Ukraine and hot and dry summers in the northern hemisphere.
Macro – economic traders are convinced the world has slipped into recession and demand for every commodity include grains and oilseeds, is about to decline precipitately.
Macro traders (hedge funds) have sold an enormous amount of agriculture futures in the past month- going from a record long position to no position.
Hot and dry weather continues to have a negative impact on yields in Europe and the US. Demand from China has been tepid the last few months as they struggle to recover from their zero-COVID policy.
Prices locally are unchanged – as export demand for mainland grain remains very strong and farmers remain reluctant sellers.
A comment on foot and mouth disease; this is a horrible disease that must be kept out of Australia and Tasmania- what ever the cost. If FMD were to come to Tasmania it could wipe the grain industry. Most grain produced in Tasmania is to feed livestock. Without this demand- grain farmers would be forced to sell their grain on the world market. That would have a very significant impact on prices and returns to farmers.
Let’s work together to ensure FMD never gets to Tasmania.