Via Big Picture Agriculture , the UN gives a negative outlook for grain prices:
Global food prices could decline further in coming months after hitting their lowest level in more than a year in July, the United Nations' food agency said on Thursday, pointing to prospects of abundant grain supplies.I can hear the farmers already, "but the corn out in Iowa and Minnesota is a lot worse than what people think." I don't think it will matter. The combination of funds moving from commodities to stocks and the increasing yield trend is pointing to lower prices for a fairly long time. Some folks who've gotten fat and happy the last few years are going to be worse off going forward. That includes me.
Food prices surged during the summer of 2012 due to a historic drought in the United States but improving prospects for cereal supplies in 2013/14 are fueling the opposite trend this year, the Food and Agriculture Organisation (FAO) said.
"Supplies are proving to be much better than anticipated a few months ago. The weather has been pretty good in many cases and is giving hope for higher production," FAO senior economist Abdolreza Abbassian said.
He said good prospects for maize output in the United States, Argentina and the Black Sea region meant corn prices could lead other markets down this season, reversing their supportive influence on higher prices last summer. Food prices could face further downward pressure if the U.S. dollar strengthens, he said. A stronger dollar weighs on dollar-traded commodities as it makes them more expensive to holders of other currencies.
"There is an extent to which prices could fall," Abbassian said. "But I'm not sure we are going to see as much of a decline in coming months as we saw in the past few months."