World grain prices seen to remain depressed in 2010

Global grain prices are likely to remain depressed for the rest of the year and Chicago Board of Trade wheat futures may hover around US$4.8 a bushel during the second quarter, according to Rabobank's report.

 

It said corn prices will be under pressure, with CBOT futures averaging US$3.7/bushel during the second quarter. For the same period, CBOT soy futures are forecast to hover at US$9.1/bushel, and possibly fall to US$8.7 in the third quarter and US$8.5 in the fourth quarter.

 

There remains a significant divergence between US wheat export prices relative to both EU and Black Sea origins, which has adversely affected the competitiveness of US origin, the bank said.

 

It added that bearishness may continue in corn due to the expected expansion in planting area.

 

According to the USDA planting intentions report, US corn plantings are likely to rise 3% on-year to 88.8 million acres in 2010.

 

Soy supplies have been slow to reach ports in South America and eventual destinations, but given the sheer volume of available supplies combined with an estimated 1% projected increase in US plantings it is hard to be anything but bearish about prices, it said.