The supply crunch in the global grain markets could linger past this year.
Agricultural markets have roared back in recent months from a first-half plunge, bolstered by strong demand from China and smaller-than-expected harvests that are winding down in some key producers, Soren Schroder, the former CEO of trader and processor Bunge, told the Global Grain Geneva conference this week.
That’ll set up an acreage battle going forward between corn and soybeans, and it will likely take more than one growing season for the markets to return to balance or a surplus of inventories, he said.
Soybean prices surged to a six-year high this week in Chicago, and corn futures are near their loftiest since mid-2019. China has been a rampant buyer of both as the country rebuilds hog herds decimated by a deadly swine fever outbreak last year. Coupled with the robust demand have been worries that the La Nina weather phenomenon could curb coming harvests in agricultural powerhouses Brazil and Argentina.