Corn, wheat and soybeans prices might have peaked after this summer drought in the US according to Macquarie Agricultural Funds Management, and it would take worsening weather elsewhere to push up futures.
Corn is still up 16 percent this year at $7.505 but has tumbled 12 percent from a record $8.49 a bushel on the Chicago Board of Trade and soybeans have jumped 34 percent to $16.24 but are now down 9.2 percent from a high of $17.89 a bushel.
In Brazil, the third-largest corn grower, high prices encouraged farmers to expand planting, according to the United Nations’ Food & Agriculture Organization. That may boost the country’s harvest by 29 percent to a record 72.8 million metric tons this year from 56.3 million tons in 2011, the FAO said Sept. 19. South America, the largest soybean producing region, will probably produce a record 148.5 million tons in 2012-2013, up from 115.5 million tons a year earlier, the USDA estimates.
The FAO Food Price Index averaged 213 points in August 2012, unchanged from the previous month. Although still high, the Index value is 25 points below the peak (238 points) reached in February 2011 and 18 points less than in August last year. International prices of cereals and oils/fats changed little but sugar prices fell sharply, compensating for rising meat and dairy prices.
The FAO Cereal Price Index averaged 260 points in August, the same as in July, with some increases in wheat and rice offsetting a slight weakening in maize. Deteriorating crop prospects for maize in the United States and wheat in the Russian Federation initially underpinned export quotations, but prices eased towards the end of the month, following heavy rains in areas hardest hit by drought in the United States and the announcement that the Russian Federation would not impose export restrictions.
via Crop Prices Probably Peaked After Drought Cuts U.S. Output – Bloomberg and World food situation – FAO