(04 December 2012 – New Zealand) A supply squeeze and volatility in the agri-commodity prices is showing signs of continuing into next year according to a new report.The report said grain and oilseed markets should expect a squeeze in the first half of 2013, which may push prices higher before an expected production rebound in the second half.
Soymeal was likely to show the largest price decline by the end of the year, while analysts expected palm oil to be the strongest performer.
The outlook for soft commodity markets – sugar, cocoa and cotton – was neutral to slightly bearish next year.
Weak global economic growth and continued macro-uncertainty might cause a slight drag of demand for agricultural commodities.
The research said a low USD would provide support for prices, with the ASB New Zealand commodity price index falling 1 percent over the week. The 1.4 percent lift in the Kiwi dollar outpaced the 0.4 percent increase in the US dollar commodity prices.