Analysts Uncertain, yet Optimistic, About the Global Forecast of Grain Supply

As the global demand for corn continues to rise, analysts are waiting to see the effect the U.S. drought will have on the international grain industry. Corn is increasingly being used to convert into ethanol in the U.S. and in high demand in China where it it used to feed into the meat industry, and it has yet to be seen how this year’s significant loss in harvest will impact grain use across the globe.

From the article:

It’s not so long since agricultural commodities markets were an area of specialist knowledge shared only by a few hundred experts across the world. Since the food price spike of 2008, however, interest has gone global and news stories continue to examine future forecasts.

It’s important to get one thing straight – as things stand we are not heading for a ‘new food crisis’ similar to that seen in 2008. For starters, as our recent food prices update shows, we are not seeing uncertainty across all cereal markets; the current kerfuffle is focused on what is happening in maize markets. Even in the maize markets the picture presented in the Financial Times somewhat overstates the severity of the situation.

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