Citi Bank indicated that the Chinese economic slowdown will likely continue to burden world markets, which could eventually leading to a global recession. They lowered their world growth forecast from 2.4% to 1.6%. This might mean that crude oil prices will not likely rally, which would keep ethanol and corn prices in check.
At a recent conference, the USDA’s chief economist echoed the bank’s statements and pointed out the world’s oversupply of grain. He went on to estimate corn acres will increase by 2 million acres (near market expectations), with prices continuing to trade around $3.45. One positive note, 2016 soybean acre projections weren’t increased and cash prices are expected to be around $8.50.
Farmers constantly ask what I think prices will do. Until we see what the weather is like, I expect corn prices to stay about the same level they are today. There is too much old crop sitting in bins and farmers are delivering on “price-later” contracts, which means many end users aren’t hungry for grain.… Continue readingRead More »