River levels in Europe are falling close to a point where grain shippers will be unable to use waterways to send cargoes to customers, said Robert van der Zee, chief operating officer at supplier Cefetra BV. His comments come as crops office FranceAgriMer said low levels on the Rhine are disrupting some corn shipments and BayWa AG said it’ll postpone some grain sales because of the issue.
Winners From a Russian Wheat Slowdown
An expected slowdown in Russian wheat exports soon should allow the U.S. to move to the forefront as a global supplier of the grain, according to Gary McGuigan, president of global trade at Archer-Daniels-Midland Co.
While there’ll “definitely” be a milling-wheat squeeze in the first half of 2019, buyers will have to pay a higher price for U.S. supplies, he said. A pickup in Argentine exports may also provide some respite as Russian shipments slow, he said.
U.S. Soy Exports
Hit by the trade dispute with China, U.S. soybean exporters will probably pick up a “fair amount of business” from the rest of the world in the second half of this season, said Seth Meyer, chairman of the USDA’s World Agricultural Outlook Board. The agency last week cut its outlook for U.S. soy exports to a four-year low, and Meyer said that factors in the possibility of no shipments to China this season.
U.S. soybean prices are likely to drop further if the country doesn’t resolve its trade spat with China and if there are large South American supplies, said Dan Basse, president of consultant AgResource Co. Without a trade deal, futures could fall as low as $7.50 a bushel, he said.
Global wheat prices will probably rise as stockpiles in major exporters remain tight relative to consumption, according to Basse. In top shipper Russia, the government is unlikely to introduce an export ban, but may use other measures to restrict sales, he said. Basse said European Union exports may be as much as 5 million metric tons below what the U.S. government is expecting, and that American shipments should pick up in December or January.
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