"4 Point Buck" : Corn Report Corn....will it be the new Yellow Gold in a few years time....?
1) After reading this article at Agrimoney.com.quoting Macquarie Capital..I pondered how much KCL is required by countries for an additional 9m tons of imported corn by China over the next 3 years?......Answer, according to my calculations foreign corn growers are going to require an additional 3.4m tons of KCL to fertilize this additional 9m tons of corn.and that is JUST for Corn....hmmm
2) And remember...China has leased hundreds of thousands of arable hectares in Western Ethiopia...wonder if they will crow some of the 9m tons of Corn on their land leases? Wonder who is going to provide the potash to those fields? Then there are other crops that China will require to import and they will require fertilizers...Ever wonder why China is contributing millions and millions of dollars to build out the infrastructures of Ethiopia?...its not good will...its to provide a huge opportunity to meet its long term needs....and so close to home...hmmm
3) Falls in ag prices ahead to sow seed of next rally
17th May 2012, by Agrimoney.com
Falls in ag prices ahead to sow seed of next rally
However, the drop in prices will prove only temporary, given that it will discourage the production growth needed to keep pace with emerging market demand, as illustrated by China's growing import needs for many crops.
China's official CNGOIC crop bureau on Thursday estimated Chinese corn imports rising in 2012-13 by 500,000 tonnes to 6m tonnes, with Macquarie estimating the total at 8m tonnes, and heading to 15m tonnes in 2015.
Crop values will need to recover to support production, and the costs needed to open up new frontiers in countries such as Brazil, where bills to transport crops to port have reached $150 a tonne.
'Price rallies will be necessary'
4) "Structural factors still point to a longer-term uptrend [in prices]," Macquarie said in a report. The prospect of lower prices short-term "will limit further production expansion two seasons from now, causing stockpiles to diminish again as demand continues to advance". "Ultimately this will push prices up again in a few years to the next producer price incentive level. "In the 2013/14 season onwards, price rallies will be likely and necessary."