Global: Demand for grain shows signs of weakening

While production uncertainty has provided, and may continue to provide, some support to corn and soybean prices, demand concerns are beginning to weigh on prices. Declining energy prices and a sharp drop in ethanol prices mean that breakeven corn prices for ethanol producers are now much lower. Prospects of large world supplies of feed wheat and a strengthening U.S. dollar suggest that U.S. corn exports could continue to be a little sluggish. The slowdown in the pace of the domestic soybean crush and a larger world vegetable oil situation are also indications of potential demand weakness. Emerging concerns about slowing world economic growth also translate into expectations for slowing export demand for U.S. commodities and further weakness in energy prices.