March 2, 2012

Global grain, oilseed markets stabilise in February

In February, grain and oilseed markets worldwide mostly toughened, the IGC daily index (GOI) raised 6% to almost four-month highs.

The upturn reflected concerns in early February about corn and soy crops in South America, as well as the impact of the recent severe cold spell in parts of Europe and the CIS.

Moreover, after a very high rate of shipments from the Black Sea region in the first half of the season, sales activity declined, with US grain, in particular, attracting much more buying interest.

Wheat export prices in Europe climbed by some 8%, in somewhat tighter markets, with reports of logistical problems and possible future export restrictions in the Black Sea region (though denied), seen as potentially bullish.

The world grain production estimate is lifted by 11 million tonnes, to 1,841 million, largely because of upward revisions in Australia, Kazakhstan, Ukraine, India and Brazil, the latter because losses of its main corn crop will likely be more than compensated by a larger second crop. These upward revisions outweigh a reduced corn figure for Argentina.