This year's most accurate forecasters, on both direction and magnitude, were Macquarie and Deutsche, we'll get to them next week.
The pullback in the corn market to three-year lows will prove a temporary setback, with futures "to return to nearly $5 a bushel" by the end of 2014, Societe Generale said, foreseeing corn prices far outperforming those of soybeans.The bank, which was ahead of the curve in foreseeing the fall in corn futures from August 2012 highs, said that investors were now underestimating price potential, flagging the boost that lower values will give to consumption by the likes of ethanol plants and livestock feeders."While the market is focused on the sheer volume of the US harvest after a year of volatile production estimates, we contend that the true focus should be shifted to the demand side of the crop balances," SocGen analyst Christopher Narayanan said."Demand has been notable in the first quarter" of the 2013-14 marketing year, which began in September."US exports continue to outpace even the latest US Department of Agriculture revision."Further, we note that the drop in feed prices, and continued shortage of cattle, has encouraged higher poultry egg sets and higher pork production given gains in margins on consumers shifting to cheaper meats and lower input costs."Soybeans vs cornAs an extra boost, South American output of corn looked likely to be constrained by the relatively low price of corn compared with soybeans, an alternative crop for the current planting window, and indeed the default choice for growers in Argentina and Brazil....MORE