Europe follows US lower, but who is talking about E. Europe ?
By ODA UK | Published at
European grain futures markets continue to gyrate to the tune of the key US markets last week and the sentiment held within. Across the pond, focus of attention is mainly concerned with two completely different elements; one based on fundamentals, the other more geo-political in nature.
On the fundamentals, both the spring wheat and corn plantings are significantly behind schedule, due to overly-wet, earlier conditions. The forecast is for more immediate rains, followed by a drier slot where seedings should play catch-up. If they don’t in the weeks ahead, then the massive spec shorts in Chicago will need to re-assess their positions……
The more influential feature, however, is the ongoing trade spat between the US and China. Monsieur Trump (I bet he doesn’t like that monika) appears to be gambling the farm, with his latest, hard-nosed stance with the Chinese in the negotiations, while, his key agric supporters in the rural parts of the US are, to say the least, struggling financially. Some argue that, despite reports of 95% agreement between the two sides, any deal may not now happen until just before next year’s presidential elections….In the meantime, this is a big, fat negative for US/EU/World grain/oilseeds prices.
ODA’s Eastern European clients maintain their stance that, while weather conditions have been far more conducive of late to stable cereals/oilseeds plant growth, the damage due to earlier dryness has already been done, tillers have been dropped and yield forecasts have to take this into account. The market, however, remains focused on the US. For how much longer remains to be seen, but ‘sub-optimal’ is a word that is being more and more used to describe production potential across vast swathes of Europe.