Corn Prices and Pepsi Throwback
The Grains continued down today based on the aftermath of Tuesday’s bearish USDA supply report. Wheat surprisingly continued its down trend in spite of the slightly flat report, but the term “a high tide floats all boats” comes to mind. The seasonal trend is for wheat to sell off in January, and this may lead to a wheat led recovery latter this month or in February. Soybeans tend to post a late January low, so the market may continue to sell for awhile longer. The problem with Corn is the obvious over supply with little increase is demand. Many farmers reported still-in-the-field status, but that may turn out to be a good thing this spring. More farmers are intending to plant corn next year.
Could an unforeseen problem be brewing? The public is becoming aware of the possible link to diabetes and high fructose corn syrup or HFCS (see article) that you find everywhere sugar should be. It accounts for nearly half the amount of sweetener used in the U.S. annually. The current “experiment” with Pepsi “Throwback” and other soft drinks (see article ) may be a marketing probe into the seriousness of that problem. If sales should switch to sugar based drinks dramatically, signaling a change in lifestyle choice for Americans, there could a downward spiral in corn prices continuing for all of 2010. We'll analyse these markets and more Monday.
Feeder cattle may be reduced to endangered species status. More next week.
Another blog for next week: “Is there an anonymous big bidder in Treasury actions?" For more information about this week's US Treasury auction results, click here:
