"Goldman lifts corn price estimates, citing demand"

From Agrimoney:

Corn futures are on their way up despite economic fears stoked by the eurozone crisis, Goldman Sachs said, upgrading price forecasts – while cutting hopes for soybeans.

The investment bank raised by $0.70 a bushel to $6.85 a bushel its forecast for corn prices in three months' time, ditching a forecast that corn prices were on for a decline.

The upgrade followed the US Department of Agriculture's latest benchmark Wasde crop report, which Goldman said while looking fair on domestic corn production, may have underestimated demand.

Corn buyers should exploit any pullback in Chicago futures, which lost a further 1% on Thursday, to "layer in hedges" in expectation of higher prices.

'Margins remain positive'

The bank estimated US feed use of the grain at 4.675m bushels in 2011-12, 75m bushels more than the USDA's estimate downgrade in the Wasde, a cut which many analysts questioned.

"Cattle and hog margins remain positive at current corn prices, pointing to near-term strength in feed demand," the bank said....MORE