Goldman Sachs cut its forecast for corn futures, saying the grain "will win the battle" for US plantings – but warned that even modest weather setbacks could send prices near to $9 a bushel.
The investment bank reduced by nearly $1 a bushel to $6.20 a bushel its forecast for Chicago corn futures in three months' time, with the estimate for prices in a year receiving a similar downgrade, to $5.80 a bushel.
Goldman also downgraded its estimate for Chicago soybean prices by $1.00 to $15.00 a bushel on a three-month perspective, citing the better prospects for South American crops, while keeping longer-term forecasts at $15.75 a bushel.
Indeed, the oilseed looked set to lose out in the battle for US spring sowings against corn, for which "compelling profit margins" for farmers would lift sowings by 3.9m acres to 92.1m acres, the bank said, adding 200,000 acres to its November estimate.
"February average new-crop prices confirmed our expectation that the corn and cotton crops would see the largest US average gains," Goldman said, in a report ahead of a much-anticipated US Department of Agriculture report, on March 31, on American crop sowings.
My comment: fundamentals clearly haven't changed in spite of the Japan crisis; indeed prices will rebound as soon as normalcy returns to Japan. Middle Eastern uprisings only add to the oil price pressures and will keep costs higher.
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