We think ABN are early, there is just so much stuff around although we expect some late summer La Nina weather to give us a long trade.For orientation here are the weekly chart:
Corn 362-0 up 3-0
Wheat 465-2 up 2-4
Some revival in grain futures is on the way, ABN Amro said, even as it cut its estimate for values near-term – saying that these low prices were having an impact in quelling growth in supplies.
Some stabilisation in grain prices this year could be a sign that the drop in grain prices could – after nearly four years - be running out of steam.
"The fact that prices have been moving sideways for the last few weeks would seem to indicate that prices have now bottomed out," said ABN Amro analyst Frank Rijkers.
The flattening comes amid some signs that weak prices may be having an effect in curtailing farmers' enthusiasm for maximising production, with the bank highlighting an International Grains Council forecast for a drop of 1.4% in world wheat sowings in 2016-17.
"After three years of over-production, we are now seeing signs of a turnaround," Mr Rijkers said.
"Low prices… mean poor returns for farmers," who are "consequently starting to change their cropping plans, with the result that less wheat is forecast to come onto the market".
'Upward pressure on prices'Meanwhile, in corn, the bank noted that not all countries have enjoyed strong harvests, with South Africa gripped in a drought which "is triggering increasing fears of a food crisis", and dryness denting Indian and European Union results too.
"Reports of lower yields around the world are expected to translate into higher prices during 2016," Mr Rijkers said, flagging the potential too for support to values from the knock-on effects of an expected recovery in oil prices....MORE