When is it most advantageous for Beijing to narrow the gap between Chinese and international corn prices? It is mid 2010. Corn is below US$3.50/bushel and appears to be headed lower. Analysts and large banks are forecasting years of corn below US$4/bushel.
Amid mounting crop surpluses and a down trending global liquidity cycle, corn and soy fundamentals have not looked this deflationary since last decade's financial crisis. In our August feed crop articles, we predicted that the USDA's inevitable boosting of record yields would tank corn and soy futures as the harvested crops started to come in.