Tightness In Global Grains Markets To Continue - IGC
2011-12-16 11:58:16
General tightness in global grains and oilseeds markets is set to continue, the International Grains Council said, with a further decline forecast for grain exporters' carryovers in 2011-12.
However, the IGC said recent steep falls in export prices reflect ample immediate market supplies, especially for wheat after large Black Sea crops and big harvests in the southern hemisphere.
The situation for corn remains tighter, the IGC said, especially after the disappointing outcome of the U.S. harvest. This is despite a considerable slowdown in corn usage for biofuels and the ready availability of feed wheat as a substitute.
The five-year prospects for wheat appear relatively comfortable, the IGC said, even assuming continued high feed use. However, corn's carryover stocks are likely to decline further, despite the maturing of the ethanol sector in the U.S.
The IGC added that global soybean supplies will remain delicately balanced following a reduced U.S. crop and continued heavy demand in Asia, with much depending on the outcome of upcoming harvests in Argentina and Brazil.