NCI Market Update | Featuring Mike Krueger
Mike Krueger, founder of The Money Farm
The Northern Crops Institute (NCI) held its monthly Market Update webinar on April 19th, 2023. This month's guest speaker was Mike Krueger, who is a cash grain trader, market advisor, commodities broker, and the founder of The Money Farm. Mike talked about the numerous factors affecting the market, including weather patterns, political situations, and war.
Mike began his presentation by discussing the moving parts behind the market. One significant factor was the consistent "La Nina," which refers to the periodic cooling of ocean surface temperatures in the central and east-central equatorial Pacific. This phenomenon has been affecting global weather patterns and crop yields. Additionally, the ongoing war between Russia and Ukraine has had a significant impact on their grain input and output. This has resulted in over 20,000 rail cars being stuck at the Ukraine/Poland border, while Poland and Bulgaria have prohibited Ukraine grain shipments.
Argentina is the world's largest soybean meal exporter and the third-largest corn exporter globally. However, severe droughts have decreased their soy, corn, and wheat production by 50%. On the other hand, Brazil has had a record soy and corn production. In the US, corn supplies have decreased, and they hope to build them up again.
According to the world corn ending stocks, we have been consuming more corn than we have been producing, mainly due to the decrease in supply. China has been importing more and more corn every year, with 65% of it coming from other countries.
Regarding wheat, the US had droughts in 2022 that cut production by 25%, and 2023 is not looking up. Russia had a record year in wheat exports, while Australia's wheat production has been trending lower due to the La Nina. India is struggling and has banned exports, and Ukraine and Canada saw a decrease in wheat production, while Russia, Australia, and Argentina saw varying increases.
The market is driven by various factors such as weather patterns, economic growth and consumption, Black Sea production and shipments, China's geo-political actions regarding Taiwan, and renewable diesel consuming world vegetable oil surpluses and acreage competition going forward. Mike concluded his presentation by stating that "the world is still a mess," highlighting the numerous uncertainties in the market.
In conclusion, Mike Krueger's presentation at the NCI's monthly Market Update webinar shed light on the numerous factors affecting the global grain market. With the ongoing war between Russia and Ukraine, severe weather patterns, and declining crop yields, the market remains unstable. This highlights the importance of understanding these factors when making investment decisions in the grain market.
For more information about future webinars offered at NCI, click here.
To watch the recording, click the video below.