More Bullishness at final HAT Farm Show Seminar - Hoosier Ag Today

More Bullishness at final HAT Farm Show Seminar
12/16/2010
by Andy Eubank

The Hoosier Ag Today seminar series wrapped up Thursday at the Indiana-Illinois Farm Equipment Show with a second day of bullish thoughts for corn growers. A day after Chris Hurt�s presentation, market analyst Jim Riley and Lee Goss, a commodity broker with EFG Group in Chicago, said $6.70 corn in the coming year is within reach.

Goss told HAT that mark for July corn is not really such a big rally.

�With July corn trading in the $5.70 range now you�re talking about another dollar up. Is that possible? Well we have the situation of a possible Chinese interest in corn, the dry conditions in Argentina that will impact their corn crop, and we believe the carryover number USDA has given us is still a little overstated. And with any type of production problem at all in this country, a dollar higher is quite realistic. If the stars align and get into the right position that can certainly happen.�

Goss explained it�s hard to know when Chinese imports of U.S. corn will really break out, but if they can bring food inflation down to a more acceptable level and need to replace the reserve corn they�ve been selling, China could become an aggressive corn buyer as soon as 2011. That makes $6.70 corn even more realistic.

Goss also sees no reason for a drop-off in Chinese soybean imports from the U.S. �They only grow about 15 million metric tons a year themselves. They�re going to grind about 100 million metric tons next year with the increase in crush capacity that they have now, so their demand for soybeans is definitely going to continue.�

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Goss added, �This near term situation that we have now where their crush margins are under a little pressure and they�re delaying some shipments of beans, that�s basically because the government is trying to force down the price of beans and meal to control inflation. But they�re not going to be able to do that forever, and we believe that whether it�s copper, soybeans, cotton, sugar, whatever they import, they�re eventually in the very near term going to come back to the market very strongly.�

They�ll have to Goss says, because of the demand created by 1.4 billion people.

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