Corn, soybean rally isn’t over yet, says Macquarie
Macquarie hiked grain price forecasts, predicting that corn and soybean futures will yet set fresh records, as it forecast the need for “higher prices throughout 2012-13″ to curtail demand to match drought-hit harvests.
The bank cautioned that the US Department of Agriculture estimate for the domestic corn harvest is still too high, by 10m tonnes, warning of high levels of abandonment forced by drought in the latest of a series of downbeat estimates from commentators.
On soybeans, the USDA, which unveils its latest crop forecasts on Monday, is closer to the mark, Macquarie said, also in line with market thinking, after rains arrived in time to refresh many crops.
However, the market’s focus had now switched more to the “demand rationing side”, on which prices had further work to do to make dwindled supplies last, Macquarie analyst Chris Gadd said.