The poll of nine analysts showed that prices for grains will keep climbing over the next two months to fresh highs, then taper off after the US harvest, and as traders turn their attention to crops in the southern hemisphere and preparations to plant crops anew in the United States for harvest next year.
Prices at the end of the year, however, will remain historically high, with Chicago Board of Trade spot corn futures seen at $6.91 per bushel, the highest ever for that time of the year. But it will be off 17 percent from its current all-time high of $8.28-3/4 set on July 20. The poll showed that corn futures are seen peaking at $8.87 in early August.
Investment bank Goldman Sachs on Monday raised its forecast for corn prices to soar to a record high $9 per bushel in three months, and for soybeans to hit $20 after cutting the yield estimates for both crops. It pegged the wheat price at $9.80.
"The importance of the current US drought for the global crop outlooks is magnified by detrimental weather conditions in other key world production and exporting nations in 2012." On Monday, CBOT corn, soybean and wheat prices tumbled due to forecasts for rain in some of the parched areas of the northern US Midwest and as concerns over Europe's debt crisis sparked a sell-off in equities and other commodities.
The Reuters poll showed that CBOT soybean futures were seen ending the year at $15.40 per bushel, the highest ever at that time of year but off 13 percent from its all-time high of $17.77-3/4. It showed the price peaking at $18.04 per bushel. Chicago wheat is forecast to end the year at $7.72 per bushel, down 19 percent from its peak of $9.52-3/4, the highest in nearly four years. The analysts were expected the price to peak at $10.01 per bushel in late August. Corn and soybean futures set all-time highs last week as the worst drought in 56 years withered crops in the world's largest grains exporter, sparking worry about a food crisis like the one in 2008, when food shortages sparked riots in 30 countries.
Ricky Volpe, research economist at the Economic Research Service of the US Department of Agriculture said higher food prices this time around will not be comparable to 2008. "None of the dynamics and indicators are approaching that for 2008," he said, adding that the food price increases in 2008 were the highest in 20 years.
He said major differences include much lower crude oil prices this time around, and lower wheat prices too. In 2008, crude oil prices hit an all-time high above $147 per barrel. There was also a severe shortage of rice in Asia, which was a major factor behind the civil unrest that year. While wheat prices remain well below all-time highs above $13 per bushel set in 2008, they have soared 55 percent in just over a month in tandem with corn and soybeans.
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