Market Morsel: Global Grain Glut?

Grain | 15th March 2024 | By Andrew Whitelaw

Market Morsel

Many organizations around the world provide grain supply and demand updates. One of those is the International Grains Council (IGC), which has released its first update for this year’s crop.

It’s not great for pricing.

The IGC has raised production for wheat and maize, with forecasts of the largest overall grain crop in history.

This is bearish news for the marketplace at a time when prices have been falling in recent months due to abundant supplies and cheap grain flowing from Russia.

Many analysts and commentators have called out a new norm when prices will find a new floor – and many speculated it was higher than where the current market is. I’m sorry to tell you, but there is rarely a new norm.

Commodity markets work in cycles, and we are currently in a down cycle. There are two things to remember though: high prices are the cure for high prices (and vice versa), and there is a long way to go until harvest.