Goldman hikes grain price outlook in ‘sharpest shock’ since 1970s (NYSEARCA:WEAT)

Goldman hikes grain price outlook in ‘sharpest shock’ since 1970s (NYSEARCA:WEAT)

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Global grain prices are set to rise further in the “sharpest shock” since the 1970s, Goldman Sachs predicts, hit by shipping disruptions, surging input costs and concerns about new plantings in Ukraine.

Goldman raised its forecast grain prices, seeing corn climbing to $7.75 per bushel by summer, while soybeans could trade at $17.50 and wheat at $12.50 per bushel, according to a Bloomberg report.

“We see clear upside pressure across global grains curves, with the new-crop grains contracts lagging the front as the market waits to see the extent of the disruption in Ukrainian planting,” the Goldman team writes.

Traders should reduce bets that the U.S. will step in and feed the global grains demand, Goldman says, since U.S. farmers have little spare capacity to increase acreages, which are already near records, and crop nutrients are too expensive to provide an easy solution to increase yields.

ETFs: WEAT, CORN, SOYB

In Tuesday’s trading, Chicago wheat for July delivery (W_1:COM) settled -4.6% to $11.95 1/4 per bushel in a volatile session, following last week’s record 40% surge, while May corn (C_1:COM) +0.3% to $7.53 per bushel and May soybeans (S_1:COM) +1.1% to $16.89 3/4 per bushel.

Global food prices hit an all-time high last month – before the full effects of Russia’s invasion of Ukraine – up 3.9% from January and 24.1% from a year ago.

Originally Posted on: https://seekingalpha.com/news/3810898-goldman-hikes-grain-price-outlook-in-sharpest-shock-since-1970s?source=feed_tag_commodities
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