At the end of February, the USDA Department of Agriculture organized the 'Agricultural Outlook Forum'. The Ministry of Agriculture expects a dynamic grain market for the 2020-21 season. The Phase 1 deal, the coronavirus, African swine fever and tariff barriers.
All these things may have major consequences for the grain market, analysts think. What does not help the Americans is a strong dollar exchange rate. At the top of the American agenda is the Phase 1 deal that the country has concluded with China. Despite commitments, no major raw material purchases have yet started, which makes the Americans nervous.
Uncertain Chinese factor
With a lower need for raw materials - as a result of ASF and the coronavirus - plus a world soy price under pressure, it suits the Chinese to stall for time. The coronavirus is an uncertain factor, because the final impact is guesswork.
There are increasing reports that spring 2020 will also be wet in the US. This in turn has consequences for the choice of crop and the final yield. In addition, in some places there is still corn in the field, where another crop will soon be grown.
Area increase
The USDA expects the areas of wheat, soy and corn to all increase in 3. That is not surprising, given the enormous amount that was not sown last year. In reality, the areas will return to the level of 2020, or even 2018% below.