– The 2021/2022 season has come to an end. How did he sign up? It was certainly one of the most unpredictable, with huge volatility in quotes. And what will the season 2022/2023 be like? It will certainly not be easier than the previous one, says Mirosław Marciniak from InfoGrain in his weekly report on agricultural markets.
The war is not over and the information built around it will shape the agricultural commodity market. The speculators now have a lot to do and wind up a spiral. How did the 2021/2022 season start?
Were there flashes then that it can be so unpredictable and surprising?
– Last season started relatively calmly. USDA’s assurances of comfortable grain and oilseed balance sheets did not encourage speculative capital to increase its involvement in commodity exchanges. However, it quickly turned out that the world’s balance sheets are not so comfortable, and the weather problems in many regions of the world were translated into the quotes. Already in September, the quotation of wheat on the MATIF exchange was 23% higher than at the beginning of July. The quotations of European rape also increased by 20% – Marciniak reminded in the commentary.
He added that trading records were not recorded until the second part of the season, mainly in response to the war in Ukraine. Wheat quoted on the MATIF exchange exceeded EUR 400, while rapeseed tested as much as EUR 1000.
–
–
Speculation on the grain and oilseeds market in 2022.
However, recent weeks have brought a solid correction in quotations, both in the cereals and oil markets.
– Why such a sudden change in the attitude of speculative capital? Have the global balance sheets improved significantly? Is the war over our eastern border coming to an end? Or maybe the Ukrainian ports have finally been unblocked? None of these things. The recent sell-offs are linked to mounting concerns about a slowdown in the global economy. The word “recession”, which appears more and more often, scared speculative capital, which is visible on all capital and commodity exchanges. For the capital markets, it was the worst first half of the year in 25 years. The funds are looking for “safe havens”, such as recently bonds, Mirosław Marciniak believes.
Does this mean that the highest levels are behind us, and the 2022/2023 season will bring prices down on world markets?
According to the InfoGrain representative, concerns about a slowdown in the global economy will remain, which may limit the inflow of speculative capital to commodity exchanges.
– The war on our eastern border is still going on and there are no signs that it will end soon. And the unblocking of Ukrainian ports is still an undefined future. The prolonged war is also a problem with the sowing of winter wheat and rape in Ukraine, which may also translate into the next season, i.e. 2023/2024 – adds the analyst.
–
–
In his opinion, the coming weeks will verify the assumptions about the global harvest of grains and oilseeds in the current season – in my opinion, the USDA continues to significantly increase production, and the global balance sheets are much worse than forecasted by USDA.
– Is it enough to convince speculative capital to return to commodity exchanges? The next few weeks should bring an answer. One thing we can expect is the very high volatility that will accompany the grain and oilseed markets in the new season – says Mirosław Marciniak at the end.
–
