By LARRY KERSHNER
Farm News news editor
Hang onto your corn, because if a single analyst is proper, the futures market place could check, or push by means of, the $ eight degree in 2012.
Darin Newsom, senior analyst at DTN, informed a webinar audience Tuesday morning that gold and crude oil will the two have their bullish rallies in 2012, buyt the fundamentals indicate corn “will be the leader of all commodities.”
Newsom pointed to the domestic and world ending stocks as 1 of a number of indicators that “corn is poised to make an explosive move via the 3rd quarter … at least until we see commence to see the 2012 harvest” and anticipated yields.
The other variables set to push the industry greater, Newsom said, are the latest re-entry of non-commercials into the market place and the South?American drought that threatens corn yields in Argentina, the world’s second most exported of corn.
Regardless of a drop in demand in livestock feed, exports backing off and ethanol’s demand on corn stabilizing, it is non-commercials that will stress the market, Newsom stated.
In 2008, non-commercial long contracts totaled 500,000, dropped to 125,000 in 2009, but considering that has jumped to 600,000 in 2011, equalling 3 billion bushels, a billion much more than ethanol utilizes.
In 2011, outside investments pulled funds out of corn, even as other demands have been growing, and the futures price followed the downward trend, Newsom said.
Nevertheless, with 313,000 new contracts in past many weeks, coupled with the normal market place rally trends in late-winter and spring, the industry price will go up as endusers search to securing their 2012 supplies.
“It appears (traders) are taking the South American circumstance into impact,” Newsom stated.
The U.S. leads the nation with 36 % of the complete world production of corn. China is a distant second at 18 %.
The U.S. also leads the globe in corn demand – 32 percent – and largest exporter of corn at 44 percent.
{ 0 comments }