The expected recovery in global grain and soybean stocks is
not enough to protect investors from the threat of price volatility, USDA chief
economist Joseph Glauber said, highlighting growth in consumption as well as
Mr Glauber, whose position makes him one of the most
important commentators on agriculture markets, said that world wheat crops were
"pretty good" apart from in the US southern Plans, "where a lot of the crop
continues to be in poor and very poor shape".
He also highlighted the strong condition of the US corn
crop, which "all of a sudden looks quite good", adding that "prices have fallen
The USDA on Monday estimated the corn crop at 75% in "good"
or "excellent" condition, an unusually strong rating, even for early in the growing
year when figures tend to be higher.
Nonetheless, "largely we are looking at grain stocks which,
whole increasing, still look fairly tight", Mr Glauber told the International
Grains Council conference in London.
Although the world was looking at record harvests of many
crops, we also have global record use".
"The rebuild has not occurred as fast as we would have anticipated
15 years ago."
In soybeans, consumption had been fuelled by a "strong
annual growth rate, of 4% in recent years, in China", he said.
Grain markets were "still subject to some weather
disturbance somewhere. There is still potential for some [price] volatility".
The comments came ahead of the release on Wednesday of the USDA's
monthly Wasde crop report, which is expected to trim estimates for world inventory levels of corn, soybeans and wheat in 2014-15, but to levels still showing
some recovery in inventories over the season.
Soybean inventories are expected to be shown ending the season at a record 81.97m tonnes.