While energy prices (oil and gas) have fallen sharply in the past three months, the prices of agri-commodities (wheat, coffee and maize) have risen. In time, ABN Amro expects grain prices to come under pressure. This is how it says in the Monthly Update Resources about March.
Wheat, maize, soybean and sugar prices will be stable over the next three months, according to the bank. That means a price that does not deviate more than 5 percent from the current market. The long-term outlook does not look good for wheat and sugar, because ABN Amro expects a price decrease.
Maize will be able to maintain its current level for a longer period of time, but soybeans are looking forward to a price increase in the long term. The Brazilian soybean is already half harvested and the USDA expects a record harvest. Expectations were revised upwards last week. The USDA expects production to increase by about 4 million tons.
The USDA also reported a higher-than-expected corn crop. Both soy and corn reacted negatively to the news. The bank expects that the price will not fall further in the next three months, but will stabilize.
For sugar, ABN Amro is counting on prices to fall in the longer term. For the shorter term (three months), they expect the sugar price to stabilize at a high level due to a bad harvest.
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