WORLD grain supply and demand trends paint a rosy picture for grain producers on the pricing front at least into 2021 according to research from Rabobank.
In its annual Agri Commodity Markets Research outlook, Rabobank said the current period of agricultural commodity inflation was unlikely to ease before the middle of the year in particular.
Stefan Vogel, lead of the research team that put the report together, said soybeans, which have a strong correlation with canola on the pricing front, corn and wheat were expected to be particularly strong.
The La Nina event, so welcomed in Australia for bringing above average rainfall, has the opposite effect in key grain producing regions in both North and South America, which is impacting supply of grain.
In particular, Rabobank said South America was at risk from drought due to La Nina.
Mr Vogel said wheat prices have reached their highest levels since 2014, but while stocks have grown this season he did not rule out further price rises, spurred by increased global
demand brought on by the COVID-19 pandemic as countries look to secure supplies.
Soybean values have soared, bolstered by a massive Chinese import program, with prices hitting four-year highs this year.
This is expected to continue into 2021 led by continued demand from China.
Mr Vogel said agriculture had been one of the few industries to weather the COVID-19 storm relatively unscathed.
"2020 has been a year like no other, but the agri-commodity supply chain has fared well, ensuring the global food supply has remained intact during the pandemic despite stockpiling by both countries and consumers," he said.
"The current circumstances have given farmers some respite after years of stubbornly low prices but 2021 brings its own risks.
"Even with rising hopes of a vaccine, Covid19 remains a difficult to predict risk, while La Nia has the potential to hit crop yields across the world.
"Wheat, corn and soybean prices are set to remain high and could increase further, with farmers continuing to take advantage of the favourable production and exporting conditions."
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
