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By Chris Lyddon (World Grain), 27/12/2018. The world’s grain markets face a year of challenges and uncertainty, with weather and politics likely to drive trade flows and prices, said the keynote speaker at the Global Grain Conference in Geneva, Switzerland. The trade war between the United States and China has changed the landscape and, if settled, could once again mean massive changes, said Dan Basse, president, AgResource, Chicago, Illinois, U.S. Huge government debt, the likelihood of interest rate increases, and volatile currencies are among the potential threats the market faces. He added that demographic changes mean the demand growth focus is shifting to Africa. Basse described the market ahead as “a more vibrant market and more vibrant opportunity forthcoming.” He noted that over 80% of trade in Chicago is now non-human.
“Today we see the world wheat stocks-to-use ratio at a record low. That makes 2019 a very, very important year for world production.”
At the same time, weather patterns are changing. “This last year we saw a very dramatic drought in Argentina,” he said. “Australians are seeing their second drought in a row. We have problems in Europe. Climate change is real.”
New drivers are emerging in the wheat market. “World wheat trade has increased nearly 90 million tonnes in just the last eight or nine years,” he said. “This is a big change.”
