Rabobank: Expansive Fiscal Policy Boosts Economy

USAgNet - 06/09/2021

Expansive fiscal policy is giving the economy an additional boost, while vaccination is progressing at a faster pace than in many other industrialized countries, Rabobank says in its April 2021 North American Agribusiness Review.

Rabobank's 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.

- Imports from Asia are causing delays and congestion at ports. Shippers attempting to move goods domestically or from ports to inland warehouses are encountering delays, as many goods and containers can get stuck at ports. Subscribe here for Grain E-News delivered every Thursday to your inbox. ??

- Checks from the third and largest stimulus package began rolling out mid-March. Following the first two rounds, stimulus recipients spent 10% to 15% more in restaurants, and we expect an even bigger and more uniform impact from the third stimulus.

- The combined effects of the third stimulus and the timing of the spring grilling season have continued to drive retail beef prices. Meanwhile, increased buying from restaurants adds further fuel as Covid restrictions ease.

- Strong US exports, lower-than-expected 2021 corn planted acres, ongoing weather issues surrounding Brazil's safrina crop, ongoing dry conditions in the western Corn Belt, and tightening US corn stocks have left the market with plenty to worry over and corn futures well supported.

- Dairy commodity prices are climbing, and milk prices are following suit. As a growing share of the population is vaccinated and as restrictions get lifted, foodservice channels anticipate a demand jump.

- Lower inventory and labor constraints boost US pork markets, while Mexican markets head higher in response to stronger US hog markets, lower imports, strong exports, and reduced hog availability due to disease.

- The March Planting Prospective report revealed that planted soybean acres fell below expectations, but principal crop acres only increased 6.05m acres. The lower planted soybean acres will result in record-low ending stocks for the 2021/22 crop year.

- US sugar stocks are growing, and while prices have not yet reflected this reality, it is only a matter of time before prices will be pressured lower.

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