Crop Prices Probably Peaked After Drought Cuts U.S. Output
by Luzi Ann Javier (Bloomberg BusinessWeek) Rallies in corn, wheat and soybeans because of drought in the U.S., the top grains shipper, are probably over and it would need worsening weather elsewhere to push up futures, said Macquarie Agricultural Funds Management.
“Prices of grains and soybeans may have already peaked as the news around the drought in the U.S., as well the weather in FSU and Australia is pretty well priced in,” said Tim Hornibrook, an executive director, referring to the former Soviet Union. The fund manages 3.2 million hectares (7.9 million acres) of farmland, about the size of Egypt’s agricultural area.
Futures have retreated on signs of slowing demand after corn reached a record in August and soybeans touched an all-time high this month. Global demand for corn will drop 0.9 percent in the 2012-2013 marketing year, the first decline in 17 years, even as U.S. farmers collect the smallest crop in six years, according to the U.S. Department of Agriculture. READ MORE