Global Appetite Will Drive Grains

By Kharouf, Jim | Futures (Cedar Falls, IA), November 1997 | Go to article overview

Global Appetite Will Drive Grains


Kharouf, Jim, Futures (Cedar Falls, IA)


This year's solid yields in corn, soybeans and wheat will be tested by an even stronger world demand. With slim stocks, El Nino could become the wild card in the grain-buying season.

Take all you want, we'll grow more. That's the message from farmers who produced strong corn and soybean yields and now expect a world buying spree to shore up prices.

With the harvest done, the strength of this year's market now is demand-driven. Countries, including the United States, are clamoring for more grains than ever as cattle and hog feedlot populations continue to expand. More aggressive livestock and poultry programs in Asia are contributing as well. The macroeconomic elements are bullish again for the grains regardless of the size of the crop.

Tech talk: Beans in the teens?

By Jim Martens, commodity specialist at Elliott Wave International in Gainesville, Ga

Most continuation charts only show data back to the 1970s. Since then it appears that soybeans have managed to do little more than consolidate, albeit in a wide price range. That consolidation has more dramatic significance, however, when you put it in the perspective of a chart of prices received by farmers. That data goes back much further and reveals a decades-long rally sequence, of which this consolidation represents merely a lengthy pause. This pause can be identified, in Elliott wave terms, as wave four in what will prove to be a five-wave advance from the low registered in December 1932. In other words, this "pause" is about to end, and prices are going to start moving up. What makes this long-term market perspective relevant now is that wave five may already be underway, and it should carry the cash price well above $10 and the nearby futures contract into the teens, maybe beyond.

Cattle, hog and poultry production is up and heading higher worldwide, notes Tim Hannagan, a grains analyst with Alaron Trading in Chicago. China, for example, increased its poultry 18% this year over last, and it still is pursuing a plan to double cattle and hog production over the next three years. Indonesia, an exporter of grains three years ago, now is a net importer.

And the U.S. trend is no different. Heading into October, U.S. cattle producers recorded eight straight feedlot increases for the year, a 19% gain over that period last year. Hog feedlot numbers rose 2%, and that figure is expected to grow as well. The bottom line is that more cattle, hogs and chickens simply means more grain needs to be bought.

"The expansion worldwide is still underway," Hannagan says. "Plus, the U.S. is [included] this year."

So a very bullish scenario is shaping up. Exactly how optimistic depends on several factors, including the success or failure of South American corn and soybean crops this winter.

And, of course, this year's El Nino weather pattern is the wild card in the equation. There are mixed opinions about the importance of El Nino on various crops and regions. Some analysts say Brazil's geographic proximity to the heart of the weather pattern could mean excessive rain will hamper corn and soybean production. Others say Brazilian crops historically have performed quite well during past El Nino patterns. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Global Appetite Will Drive Grains
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.