In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
On Friday the USDA will post its first survey-based estimate of this year’s corn crop. Corn yield, which was initially pegged at 166 bushels per acre and cut to 146 last month, will undoubtedly fall much further. Corn futures at $8.10 per bushel have likely factored in about a 130 yield. A number in the 120s (as projected by several private forecasters) would be devastating. With ethanol mandates in place, corn prices would have to rise high enough to sharply curb both exports and domestic feed usage — and that in turn would be devastating for poultry, dairy and livestock producers. Meanwhile, Goldman Sachs said that dry weather in the former Soviet Union, Australia, India and Argentina will cause the USDA to lower world wheat output. Goldman thinks Chicago wheat futures prices (currently $8.91) will hit a high of $9.80 per bushel in the next three months.
Contact John T. Barone at jbarone@mktvsn.com.