Demand and Global Outlook (Oct. 31, 2011)
As we examine demand and supply factors for commodities it is also important to consider the larger picture. In many of our classes we discuss the growing population and consequently an increase demand for food and price spikes along the way. Oct 31st has been declared “Seven Billion Day”1 by the UN, as the seventh billion person was born today somewhere in the world-crazy right? Thought this tidbit of info would just be add another fact into your pocket…now lets look at issues in demand for this week….
Corn: Reports from a US Grains Council representative stated that South East Asia will be seeking corn imports to go towards animal feed. With increasing preferences towards meat, in order to keep up with production it is estimated that Indonesia import 2.5-3million of corn this year. Speculators in South East Asian are now paying closer attention to CBOT.2
Wheat: As noted in our earlier blogs, Egypt is one of the largest importers of wheat. It was announced today that Egypt would be importing from Ukraine for the first time in three years, while no mention of US imports were mentioned. However, Bloomberg News week discussed how Ukraine and EU are boosting their crop exports and are in high competition with the US. Export demand from the USA could be in a slump with EU and Ukraine with strong production projects and exporting steadily.3
Sources: 1) http://www.theglobeandmail.com/news/world/worldview/its-a-girl-world-celebrates-the-7-billionth-person/article2219666/ 2)http://www.asianagribiz.com/display.aspx?PageID=0&MemberID=0&screenheight=800&screenwidth=1280 3) http://www.businessweek.com/news/2011-10-31/corn-slides-in-chicago-as-ukraine-eu-crops-boost-competition.html