Crop markets nearing 'crunch time', warns Rabobank
Rabobank cut forecasts for wheat prices as it warned investors to be on their guard for a potential "sharp collapse" in agricultural commodity prices, given historical precedents.The bank said it not did not expect the "crunch time fast approaching for global commodity markets" to bring a tumble in prices back to average levels, given tight inventories of many crops.However, it alerted investors that "history suggest that commodity markets… should be about to fall off a cliff"."Following every significant grains market rally since 1980s, there has been a sharp and significant collapse in prices, with most corrections starting in July or August," a period which has brought weakness to coffee and cotton markets too."Macro uncertainties remain, and fears of a slowdown in global, and particularly Chinese, economic growth are likely to weaken demand and certainly lessen speculative interest in agricultural markets."'Diminished production concerns'The comments came as Rabobank analysts revised estimates for crop prices, including downgrades to, in particular, Chicago wheat, which it saw averaging $7.40 a bushel in the coming quarter down $0.60 from the previous target.Forecasts for wheat prices further ahead were lowered too, by $0.50 a bushel to $7.00 a bushel for the first quarter of 2012."Diminished production concerns in the first half of June", following rains in Europe, and "expectations of Black Sea region exports have eased uncertainty surrounding new crop supplies", the bank said in a report....MORE
