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Talking about shifting planting patterns and China’s hunger for corn is all well and good, but in an environment where the U.S. dollar is riding high, just about all major commodity markets are feeling the pressure. Food is not immune.
Fertilizer stocks remain a cult on Wall Street as a way to get exposure to the theoretically unlimited upside potential of the agricultural business. After all, everyone needs to eat, and we trade what we know, right?
Strong cane harvests in key growing regions like Brazil, India, and Thailand have depressed sugar prices, diverting consumption from food to fuel and heightening pressure on corn syrup and ethanol producers alike.
The USDA could give commodity traders an excuse to take profits in soybean contracts this morning — or push the recent bull run to new levels.
Shifting consumption patterns and recovering harvests are giving Russian farmers more wheat and corn to sell overseas, and if Vladimir Putin is on the money, the final export numbers should help make up for drought conditions elsewhere.
Since mid-December corn and soybean futures have been trending higher up to hit six month highs this week. The technicals confirm the move and remain bullish heading into the U.S. planting and growing season for both crops.
The second largest corn (CORN, quote) importer, China, sees corn imports surging to a record 28 million metric tons by 2015 -16, reflecting roughly a 700% increase in the next few years. Part of this is due to the likelihood of crop failures, but the rest is squarely in the lap of a growing middle class.
