World Grain - March 2021 - 6

FROM THE EDITOR
EDITORIAL STAFF

How long will
the bull run?

A

fter a seven-year mostly bearish
JUDLQ PDUNHW WKH EXOO ¿QDOO\ KDV
been unleashed as several factors
have simultaneously emerged to form a perfect storm of volatility.

Most important is China's sharply
increasing demand for grains and oilseeds. The burgeoning economic superpower, which comprises nearly 20% of
the global population, recently drafted
new grain reserve laws amid food security concerns that stem from the COVID-19 pandemic that originated in China
and has infected more than 113 million
people worldwide and killed nearly 2.5
million over the past 14 months.
China's recent surge in corn and soybean imports was, to a certain degree, expected as it attempts to restock its swine
herd - by far the world's largest -
which was reduced by roughly 50% over
the past two years due to an outbreak of
African swine fever. More surprising,
however, is that China, traditionally selfVX൶FLHQWLQZKHDWDVWKHZRUOG¶VVHFRQG
largest producer, is also projected during
the 2020-21 marketing year to import its
highest total (9 million tonnes) of that
traditional food grain in 25 years.
Also playing a role in the bull market
are a strengthening Chinese yuan and a
weakening US dollar - both of which
appear to be long-term trends - and the
adoption of grain export restrictions by
Russia and several other major grainproducing countries that are trying to
NHHSGRPHVWLFIRRGLQÀDWLRQLQFKHFN
With these elements already in place,
all that is needed to send grain and food
prices even higher is a widespread adverse weather event that shrinks supply unexpectedly. As it stands now, the
International Grains Council's most
recent forecast sees a global record for
total grains production in 2020-21 at
2.22 million tonnes, but dryness has reduced prospects in South America and
6

some meteorologists are predicting a dry
spring in North America, which could
hamper output there as well. Stay tuned.
Wheat, corn and soybean prices
reaching their highest level in seven
years has pulled food prices up to their
highest point in six years. This comes at
a time when economies have been ravaged by high unemployment and, consequently, reduced incomes because of
the pandemic.
High grain prices and greater volatility are a welcome development for
grain producers and savvy agricultural
commodity traders but are viewed much
less favorably by end users of those raw
materials and food consumers, who see
the higher costs ultimately passed on to
them at the grocery store.
How long this bull market lasts probably will mostly depend on China. Eventually, the country's grain stockpiling
goals will be met and import demand
will return to the mean. And at some
point, the COVID-19 crisis will abate,
which will allow major grain-producing
countries to focus less on stockpiling for
food security reasons and more on capitalizing on export opportunities.
A more ominous view of the current
uptick in agricultural commodities -
along with similar rallies in energy and
precious metals - is that it could be a
SUHFXUVRUWRJOREDOLQÀDWLRQVRPHWKLQJ
that has been feared
since many government's began furiously
printing money during
the pandemic to stimulate their economies.
While
commodity
SULFHVDUHQRWLQGLFDWLYHRILQÀDtion, they can be a good starting point
when attempting to hedge against it.
Arvin Donley
Editor

Editor
Arvin Donley
Managing Editor
Eric Schroeder
Associate Editor
Susan Reidy
Digital Media Associate Editor Holly Saddler
European Correspondent
Chris Lyddon
China Consultant
Fengcheng Wang
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WORLD GRAIN (ISSN 0745-8991) Volume 39, issue 3,
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World Grain - March 2021

Table of Contents for the Digital Edition of World Grain - March 2021

World Grain - March 2021 - 1
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http://digital.world-grain.com/sosland/wg/world-grain-april-2021
http://digital.world-grain.com/sosland/wg/world-grain-march-2021
http://digital.world-grain.com/sosland/wg/world-grain-february-2021
http://digital.world-grain.com/sosland/wg/2021_01_01
http://digital.world-grain.com/sosland/wg/2020_12_01
http://digital.world-grain.com/sosland/wg/2020_11_01
http://digital.world-grain.com/sosland/wg/2020_10_01
http://digital.world-grain.com/sosland/wg/2020_09_01
http://digital.world-grain.com/sosland/wg/2020_08_01
http://digital.world-grain.com/sosland/wg/2020_07_01
http://digital.world-grain.com/sosland/wg/2020_06_01
http://digital.world-grain.com/sosland/wg/2020_05_01
http://digital.world-grain.com/sosland/wg/2020_04_01
http://digital.world-grain.com/sosland/wg/2020_03_01
http://digital.world-grain.com/sosland/wg/2020_02_01
http://digital.world-grain.com/sosland/wg/2020_01_01
http://digital.world-grain.com/sosland/wg/2019_12_01
http://digital.world-grain.com/sosland/wg/2019_11_01
http://digital.world-grain.com/sosland/wg/2019_10_01
http://digital.world-grain.com/sosland/wg/2019_09_01
http://digital.world-grain.com/sosland/wg/2019_08_01
http://digital.world-grain.com/sosland/wg/2019_07_01
http://digital.world-grain.com/sosland/wg/2019_06_01
http://digital.world-grain.com/sosland/wg/2019_05_01
http://digital.world-grain.com/sosland/wg/2019_04_01
http://digital.world-grain.com/sosland/wg/2019_03_01
http://digital.world-grain.com/sosland/wg/2019_02_01
http://digital.world-grain.com/sosland/wg/2019_01_01
http://digital.world-grain.com/sosland/wg/2018_12_01
http://digital.world-grain.com/sosland/wg/2018_11_01
http://digital.world-grain.com/sosland/wg/2018_10_01
http://digital.world-grain.com/sosland/wg/2018_09_01
http://digital.world-grain.com/sosland/wg/2018_08_01
http://digital.world-grain.com/sosland/wg/2018_07_01
http://digital.world-grain.com/sosland/wg/2018_06_01
http://digital.world-grain.com/sosland/wg/2018_05_01
http://digital.world-grain.com/sosland/wg/2018_04_01
http://digital.world-grain.com/sosland/wg/2018_03_01
https://www.nxtbook.com/sosland/wg/2018_02_01
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https://www.nxtbook.com/sosland/wg/2017_12_01
https://www.nxtbook.com/sosland/wg/2017_11_01
https://www.nxtbook.com/sosland/wg/2017_10_01
https://www.nxtbook.com/sosland/wg/2017_09_01
https://www.nxtbook.com/sosland/wg/2017_08_01
https://www.nxtbook.com/sosland/wg/2017_07_01
https://www.nxtbook.com/sosland/wg/2017_06_01
https://www.nxtbook.com/sosland/wg/2017_05_01
https://www.nxtbook.com/sosland/wg/2017_04_01
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https://www.nxtbook.com/sosland/wg/2017_02_01
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https://www.nxtbook.com/sosland/wg/2016_12_01
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https://www.nxtbook.com/sosland/wg/2016_02_01
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https://www.nxtbook.com/sosland/wg/2015_12_01
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http://digital.world-grain.com/sosland/wg/2015_07_01
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https://www.nxtbook.com/sosland/wg/2015_04_01
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https://www.nxtbook.com/sosland/wg/2015_02_01
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https://www.nxtbook.com/sosland/wg/2014_12_01
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https://www.nxtbook.com/sosland/wg/2011_10_01
https://www.nxtbook.com/sosland/wg/20111_09_01
https://www.nxtbook.com/sosland/wg/2011_08_01
https://www.nxtbook.com/sosland/wg/2011_07_01
https://www.nxtbook.com/sosland/wg/2011_06_01
https://www.nxtbook.com/sosland/wg/2011_05_01
https://www.nxtbook.com/sosland/wg/2011_04_01
https://www.nxtbook.com/sosland/wg/2011_03_01
http://digital.world-grain.com/sosland/wg/2011_02_01
http://digital.world-grain.com/sosland/wg/2011_02_01
http://digital.world-grain.com/sosland/wg/2011_01_01
http://digital.world-grain.com/sosland/wg/2010_12_01
http://digital.world-grain.com/sosland/wg/2010_11_01
http://digital.world-grain.com/sosland/wg/2010_10_01
http://digital.world-grain.com/sosland/wg/2010_09_01
http://digital.world-grain.com/sosland/wg/2010_08_01
http://digital.world-grain.com/sosland/wg/2010_07_01
http://digital.world-grain.com/sosland/wg/2010_06_01
http://digital.world-grain.com/sosland/wg/2010_05_01
http://digital.world-grain.com/sosland/wg/2010_04_01
http://digital.world-grain.com/sosland/wg/2010_03_01
http://digital.world-grain.com/sosland/wg/2010_02_01
http://digital.world-grain.com/sosland/wg/2010_01_01
http://digital.world-grain.com/sosland/wg/2009_12_01
http://digital.world-grain.com/sosland/wg/2009_11_01
http://digital.world-grain.com/sosland/wg/2009_10_01
http://digital.world-grain.com/sosland/wg/2009_09_01
http://digital.world-grain.com/sosland/wg/2009_08_01
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http://digital.world-grain.com/sosland/wg/2008_07_01
http://digital.world-grain.com/sosland/wg/2008_06_01
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http://digital.world-grain.com/sosland/wg/2008_02_01
http://digital.world-grain.com/sosland/wg/2008_01_01
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http://digital.world-grain.com/sosland/wg/2007_11_01
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http://digital.world-grain.com/sosland/wg/2007_07_01
http://digital.world-grain.com/sosland/wg/2007_06_01
http://digital.world-grain.com/sosland/wg/2007_05_01
http://digital.world-grain.com/sosland/wg/2007_04_01
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http://digital.world-grain.com/sosland/wg/2006_06_01
http://digital.world-grain.com/sosland/wg/2006_05_01
http://digital.world-grain.com/sosland/wg/2006_04_01
http://digital.world-grain.com/sosland/wg/2006_03_01
http://digital.world-grain.com/sosland/wg/2006_02_01
http://digital.world-grain.com/sosland/wg/2006_01_01
http://digital.world-grain.com/sosland/wg/2005_12_01
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http://digital.world-grain.com/sosland/wg/2005_08_01
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