Helped along by export tax cuts, palm oil is undercutting soy oil, bruising the latter's exporter crushing margins and threatening to bring protein meal prices down another notch. Having already fallen below US$3.30/bushel, corn entered the deflationary downtrend first and is approaching its market bottom.
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.