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Emily French presents her outlook on world grain and oilseed markets on Wednesday, day one of AGIC 2025\u2019s two-day program. Photo: AGIC 2025<\/p>\n
THERE\u2019S no mistaking where Emily French stands on her view of\u00a0 global grain and oilseed markets at present; she\u2019s a bear through and through.<\/p>\n
Her take on the markets was delivered to around 600 delegates at the Australian Grains Industry Conference held in Melbourne this week, and is based on weighty crops coming in, or developing, everywhere from Argentina to Russia, lacklustre Chinese demand, and big US stocks.<\/p>\n
\u201cThe world\u2019s most visual storage tank will be holding more and more and more, and what is that? It\u2019s not bullish,\u201d Ms French said of the US situation.<\/p>\n
As the principal of Global Ag Protein, a consultancy she founded in 2009, and wide experience as a trader, broker, and analyst, Ms French said growers everywhere will need \u201cdrinks and hugs\u201d.<\/p>\n
\u201cThe US farmer has been using hope as a hedge strategy: it is not one.\u201d<\/p>\n
\u2018State of red alert\u2019<\/p>\n
Ms French is no fan of the Trump Administration, and described its potential trade policies as changing at \u201cany given hour.\u201d<\/p>\n
\u201cThey\u2019re not trade deals: they\u2019re frameworks.\u201d<\/p>\n
\u201cI don\u2019t think anyone in that administration really understands trade.\u201d<\/p>\n
The upshot is that US trading partners have no surety about tariff levels, including India, whose exports to the US may be subject to a 25-percent tariff.<\/p>\n
\u201cWe\u2019re in a state of red alert\u2026and the best thing you can do is look at what you control, and let the rest of it go.\u201d<\/p>\n
While US tariff threats are a major source of global market uncertainty, Ms French referred to the US President by the acronym TACO \u2013 Trump always chickens out \u2013 in light of his ability to reduce or delay threatened tariffs.<\/p>\n
Bullish factors lacking<\/p>\n
After massive cuts to US Government operations under \u201cTACO\u201d, Ms French described USDA data as \u201cthe one great thing the US can still export to the world\u201d, and said its figures paint a picture of the enormity of the global market\u2019s multitude of bearish factors.<\/p>\n
With China\u2019s economy contracting, Ms French said a \u201cbitter downside\u201d could be seen in its weakened demand for imported grain generally.<\/p>\n
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Figure 1: China\u2019s import demand is expected to rebound by 10Mt in 2025-26 to a level well below the previous four years.<\/p>\n
While China\u2019s total forecast grain imports for 2025-26 are seen as being up 10Mt from 2024-25, Ms French said they not give the global market \u201cthe demand that agriculture needs\u201d.<\/p>\n
\u201cReally, what\u2019s happening is China is merely returning to the average.\u201d<\/p>\n
China\u2019s stocks, on top of reduced demand from its domestic market on everything bar sorghum, plus decent crops, have tempered its appetite for imported grain.<\/p>\n
USDA\u2019s estimate of China\u2019s supply cushion on wheat sits at 303 days: \u201cThat\u2019s big\u201d.<\/p>\n
\u201cIt\u2019s going to be a rough ride, particularly for those people that are on the production side.<\/p>\n
\u201cIt\u2019s wonderful to be an end-user, finally.\u201d<\/p>\n
Aggressive exporting<\/p>\n
In her wrap of world currencies, Ms French noted the strength of the Euro, and said the Australian dollar was \u201ckind of grinding higher\u201d.<\/p>\n
Flagging is the greenback.<\/p>\n
\u201cOne thing that the world is not actually trading on is that the US dollar can rally.<\/p>\n
\u201cThe US has a debt problem; no one wants to fix it, we want to add to it; that\u2019s clear.<\/p>\n
\u201cThe Euro has clearly broken out versus the US dollar.\u201d<\/p>\n
Ms French said currency has becoming \u201cvery interesting\u201d for the first time in years.<\/p>\n
Big crops, and weak currencies, are both putting expanded volumes into the export market, with Russian farmers also playing their part.<\/p>\n
\u201cThere\u2019s no carry in the cash market: you have to pay your debt,\u201d\u00a0 she said of Russia\u2019s farmer selling.<\/p>\n
\u201cIf the ruble continues to weaken, what happens to fob wheat out of Russia? It gets cheaper and cheaper and cheaper; not bullish.\u201d<\/p>\n
Likewise, Ms French expects Brazil\u2019s soybean and corn production, and exports, to continue to grow if Brazil\u2019s real keeps within the range of five to six to the US dollar, and she said its neighbour was being even more active on the sell side.<\/p>\n
\u201cArgentina is killing it.<\/p>\n
\u201cThey lowered their export tax\u2026so we should continue to see more corn exported in the weeks and months ahead.\u201d<\/p>\n
Argentina is also aggressively exporting its soy complex, with more than 80 cargoes sold to China from current crop.<\/p>\n
With the Northern Hemisphere escaping significant production threats or risks, Ms French painted a picture of the world being awash with wheat, corn, and oilseeds.<\/p>\n
\u201cThe world does not have a supply threat.\u201d<\/p>\n
Futures tell a story<\/p>\n
With Europe\u2019s new-crop rapeseed, and Australian and Canadian canola all looking comfortable, Ms French said trade negotiations directed at Canadian canola from China, the US, or both could have an impact.<\/p>\n
Again, the outlook is overridingly bearish.<\/p>\n
\u201cThe risk for canola prices will be the funds are already long, and they\u2019ve already been liquidating.\u201d<\/p>\n
\u201cWhat we\u2019ve seen is an ongoing liquidation after it made\u2026a record high about a month ago.\u201d<\/p>\n
\u201cI think what you\u2019re starting to see is a retest of the lows.<\/p>\n
\u201cTrade is forecast to decline and production will go up; in no way is that bullish.\u201d<\/p>\n
While funds are short on just about everything else in the grains and oilseeds space, Ms French said they still have some positions left to unwind on canola and soy oil.<\/p>\n
\u201cThe only thing they\u2019re long is canola and soy oil; that\u2019s it.\u201d<\/p>\n
She said stocks were so high that the trade was not driving the pricing.<\/p>\n
\u201cManaged money is in charge.\u201d<\/p>\n
USDA has forecast modest year-on-year increases in wheat imports from Indonesia, Iran, Mexico, and T\u00fcrkiye, and Ms French said that demand will need to be seen soon to stave off a further easing in the wheat market.<\/p>\n
India, which has just harvested a record wheat crop, is another one to watch.<\/p>\n
\u201cWhat the hell happens if India steps back into the export market?\u201d<\/p>\n