Protein Markets
- China sees a full recovery of pig herd back to pre-2017 levels by June of this year, new rumors of foot and mouth disease will have market cautious of any further disruption.
- Brazil’s crop forecaster Agroconsult raised its estimate for 2020-21 season by 1.6m to 134MMT of Soybeans following recent crop tours.
- Delays to Brazilian soy harvest has already created a backlog in vessels waiting for new crop, current harvest pace the slowest in 10 years..
- Ethanol producers are starting to ramp production back up after losing production due to recent weather and energy crisis.
- Canadian canola crush rose 7% Jan21 vs Jan20.
PKE Markets
- Palm Oil jumps again on strong exports and stronger petroleum prices
- Palm oil prices likely to remain strong until April, supported by low global inventories until South American oilseed harvest hits full swing.
- Labor shortage remain a problem as the Malaysian government freeze’s recruitment of new foreign workers until the end-June.
Grains Markets
- US corn export inspections YTD at 23.997MMT well ahead of last year’s 13.31MMT at the end of Feb
- Brazil corn crop estimated at 108.2MMT vs 102.5 last year. Planted area raised almost 1M hectares vs last year.
- US wheat conditions downgraded after the recent cold snap.
- Warmer forecast in the US is expected to deteriorate the snow cover this week, any further cold snaps post this could cause further winterkill damage.
- Recent rainfall across the north island has stabilised maize yields. Current expectations for average/marginally above average crops. The main harvest is expected to begin in approx. 3-4 weeks.
- South Island harvest is now starting to make rapid progress with dry weather. Yields from Timaru south are back approx. 10%, Timaru north tending average.
- Australian grain logistics remain clunky and congested. Exports are expected to continue at maximum pace with strong demand until northern hemisphere (black sea) new crop is available in June/July.
- Argentine corn crop is approx 2 weeks behind normal with only 66% of the crop pollinating vs 80% average.
Currency / Political
- NZD/USD off recent highs currently trading at 0.732.
- S&P upgraded its long-term foreign currency debt rating to AA+.
- NZ retail was lower than expected in Q4 raising likelihood NZ economy has slipped back into a technical recession.
- Global covid vaccinations have exceeded global cases of covid for the first time raising hopes for markets globally.
- Oil prices continue their climb higher now over $65/barrel.
- Strong demand and higher bunker prices continue to push freight higher.
Dairy Markets
- NZ MKP for 20/21 season currently $7.36/kg/ms.
- NZ MKP for 21/22 season currently $7.20/kg/ms.
- NZ dairy demand remain relatively flat as farmers continue to try extend on farm feed. Widespread rainfall last week should bring more grass cover in coming weeks.
