PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 09:31 UK, 29th Jul 2009, by Agrimoney.com
Corn poised for firm finish to 2009, bank says

Corn prices are poised for a strong finish 2009 despite the weakness which bullish crop forecasts are set to instil in the market for now, Commerzbank said.

Investors should brace for further "significant downward pressure" on prices in coming weeks as estimates of high plantings and yields overhang the market, a note from the German bank said.

The "looming expansion in supply" prompted the bank to slash to $4.00 a bushel, from $5.20 a bushel, its forecast for year-end corn prices in Chicago.

Demand revival

However, that forecast represents an improvement on current corn prices, both for December delivery and the benchmark September contract.

"We expect corn prices to rise again from the fourth quarter at the latest," Commerzbank said, citing the "risk of disappointments" presented by a delayed crop.

Official data showed that, by last Sunday, 55% of the US crop has entered the silking phase, a stage that "normally this process is largely complete by the end of July".

Furthermore, depressed corn prices which are within 10% of hitting their lowest since October 2006 - should revive demand for the crop from biofuels plants.

"This ought to provide support to the price of corn, as should global inventory levels which remain low despite the expansion in supply," the report said.

Prices would continue to rise in 2010, hitting $5.20 per bushel by the end of the year, the bank added.