By James Wellstead — Exclusive to Potash Investing News
Reports of a case of mad cow disease in the US this week have moved grain and corn markets, which are key demand drivers for potash prices this year. Mixed weather forecasts for South America also continued to drive agricultural markets, while markets computed crop planting data released over the past week. Global grain and corn markets are reacting to the news that US government officials have confirmed that a case of bovine spongiform encephalopathy (BSE), or “mad cow disease,” occurred at a California dairy farm. While USDA chief veterinary officer John Clifford assured the public that “[t]here is really no cause for alarm here with regard to this animal,” grain-feed markets could be negatively affected if fears evolve into import bans of US beef as they did during previous scares in Japan and South Korea. The Los Angeles Times has already reported that two top South Korean retailers have halted US beef imports in reaction to the findings. Wheat and corn markets have reacted negatively to the BSE news, according to Elizaveta Malyshko, a grain analyst with UkrAgroConsult. Malyshko told Bloomberg that “we see a risk only from a price side, because wheat and corn on the Chicago exchange dropped after news about mad cow disease in California, despite other factors which were supposed to push the prices up.” Soybeans and corn still strong Troubles in key South American agricultural markets continue to push US soybean prices higher, edging the oil-bearing bean toward a four-year high. Argentina's 2012 soybean forecast figures were lowered from 44 million to 42.5 million by industry publication Oil World due to drought damage of crops. Rabobank analyst Erin FitzPatrick told Reuters that "[t]he story of the impact of the unfavourable weather in Argentina is still not at an end and there are expectations of more cuts in harvest forecasts."