North American Agribusiness Review August 2021

This periodical update provides a market outlook for dairy, cattle, wheat, and other key commodities, and gives an overview of what developments to watch in the upcoming months in North America.

picture of various US food & agribusiness products
 
- Inflation reached 5.4% YOY in June and July. The expectation is that inflationary pressures will subside, though they could remain longer than expected. Moreover, additional fiscal policy aimed at the demand side of the economy could add new inflationary pressures.

- Container shortages and imbalance were yet again exacerbated by weather events on the east coast of China and Europe and by the impacts of recent outbreaks of the Delta variant in multiple cities globally and in China’s largest ports. 
 
- Continued shipping, labor, and other supply chain challenges, combined with fears regarding the Delta variant’s potential impact, have put a premium on product in-hand ahead of summer’s last major beef-consumption holiday. 
 
- The new corn crop balance tightened up significantly and is poised to tighten further. With a high volume of sales already on the books, it is likely the 2021/22 US corn balance sheet will get tighter yet and corn prices (futures and basis) will be well supported into the new crop year.
 
- In its latest report, the USDA adjusted corn, soybean, and wheat yields as a result of continued drought conditions in the US. Prices are increasing as a result of expectations of smaller crops for all three grains, with continued pressure on animal feed costs. 
 
- The US soybean crop has been negatively impacted by dry hot conditions at a time when global demand for oilseeds and oilseed products is growing. Prices in the soybean complex will remain volatile as the market worries over Chinese demand and weather for the remainder of the growing season.
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