World Grain - November 2024 - 20

GLOBAL
GRAIN trade review
Weather, geopolitics driving world grain prices
by Chris Lyddon
G
eopolitics have dominated traders' thinking in
recent months, with conflict in the Middle East
joining uncertainty over Black Sea supplies
as the Russia-Ukraine conflict rages on, clouding the
overall supply and demand picture. Extreme weather,
from drought to flooding, also has impacted grain trading,
with several key production areas in the Northern
Hemisphere having been recently affected.
The Food and Agriculture Organization (FAO) of the
United Nations, in its Oct. 4 Food Price Index report,
put grain prices in September 3% higher than their
August level and 10.2% below the previous September.
" After declining for three consecutive
months,
global wheat prices increased in September, largely
due to concerns over unfavorable weather conditions
in some key exporters, " the Rome, Italy-based body
said. " Excessively wet conditions in Canada and the
European Union caused harvest delays in the former
and led to a sizeable cut to the production forecast for
the latter. "
However, the FAO added that " competitively priced
supplies from the Black Sea region capped the increase
in prices. "
The FAO also reported a month-on-month rise in
world corn prices, " driven by low water levels on the
Madeira River in Brazil and the Mississippi River in
the United States, along with strong domestic demand
in Brazil and a solid export pace in Argentina. "
20
Vegetable oil prices in September were up 4.6%
compared with August, reaching their highest level
since early 2023, according to the UN experts.
" The continued rise of the price index was driven by
higher quotations across palm, soy, sunflower and rapeseed
oils, " they noted.
Palm oil prices in September rose for the fourth
straight month and were " underpinned mainly by concerns
over lower-than-expected production that coincided
with anticipated seasonal output declines in major
Southeast Asian producing countries. "
Lower-than-expected oilseed crushing in the United
States triggered a rebound in soy oil prices, while sunflower
and rapeseed oil managed recoveries described
by the FAO as " marginal, " which " were supported by
a tightening supply outlook, following reduced outputs
of respective oilseeds in the 2024-25 season. "
The International Grains Council (IGC), in its
September Grain Market Report, noted that the overall
level of global grains and oilseeds prices, as tracked in
its Grains and Oilseeds Index, fell to a near four-year
low in August, before managing a modest recovery.
It described wheat as " recently touching a threemonth
high, underscored by weather worries in some
exporters, as well as broader geopolitical concerns. "
Corn was up on " light speculative and technical short
covering at CME, " while " the upside was also tied to
firmer US Gulf export premiums. "
November 2024 / World Grain / World-Grain.com
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World Grain - November 2024

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