Corn price has more to gain, eventually
The broker – forecasting the drought-hit US corn crop will fall to 10.51bn bushels this year, some 270m bushels below the current USDA estimate – said that corn prices would “remain in an uptrend”.
“December corn futures could retest and possibly exceed the high of $8.49 a bushel,” reached a month ago, Newedge analyst Dan Cekander said.
However, the highest prices may not be seen until close to the next harvest, as in 1995-96.
“In that year, the market trended higher, peaking in July, as demand gradually proved itself, with hand-to-mouth consumer buying driving the market to its eventual high.”
The forecast which tallies ideas last week from Macquarie, which said that, on a quarter-average basis, Chicago corn futures values will peak in the July-to-September period of 2012, at $8.75 a bushel.
“Deferred corn futures could trade to a long-term technical objective of $9.60,” Mr Cekander said.