Inclement weather harming global crops helped push up prices for corn futures on Tuesday morning, Bloomberg reports.
The world supply of the grain is tightening, which might help the commodity increase to record prices some time during the first two quarters of 2011k, according to analysts. Corn also is likely to be the market's best-performing agricultural commodity. Three investment houses – Agrocorp, Rabobank International and Blackstone Group – are predicting 2011 will hold record prices for corn, in part because stockpiles are reducing throughout the world.
"As the global economy recovers with steady growth, the crop prices may remain at historically high levels for a number of years," according to a Tuesday report by analyst Ker Chung Yang of Phillip Futures.
Shortly after 8 a.m. on Tuesday, corn futures were down 0.21 percent, a 1.5 cent reduction to $7.05 per bushel.
Some analysts expressed concern about climate change negatively impacting supplies of the commodity, as well as other grains. Coffee and cotton also are exposed to potential losses.
"The fact is that climate around the world is changing and that will cause massive disruptions to supply chains," Sunny Verghese, Olam chief executive officer, told Bloomberg. "We're friendly to wheat, corn and soybeans and bearish on rice."
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.