Hello, I know almost nothing of the fundamentals affecting the grain market. However, recently there has been talk about Iran, Israel, and $262 oil. I was wondering if someone could outline some possible scenarios and what their effects would be on the grains (corn, wheat, and the soybean complex), if any. Once again, I am totally unfamiliar with all of this, so please...go easy Jimmy
corn and sugar would be the major players in this to the upside due to increased ethanol usage as gas goes higher. Especially sugar. Brazil , who is the world's largest sugar producer will export less sugar so that they can use it at home to make ethanol. You can see this effect already in Sugar prices recently. A good play on oil would be sugar.
All of the sugar, corn, and soybeans grown in the US would do little to lessen our dependency on oil. The US land base could not grow enough of these crops. That also goes for hydrogen production. It requires energy to produce fuels from these sources. Hydrogen requires more energy to produce the hydrogen than the resulting hydrogen total heat value.
TF I am not certain about Wheat and Beans except for the transfer of acres from beans to corn which may raise bean prices. As far as the comment about all of the sugar etc having effect on oil, that is exactly my point, oil wll rise too,but ethanol will be employed more and more. However, demand outside the US for oil will outstrip supply. Within the space of the next 10 years, we will see 150 dollar oil and 5 dollar gas at some point. Sugar will touch 60 to 70 cents in my view.
Rumor has it that wheat prices may rise across the board due to farmers designating less land to it this spring.
That's actually quite simple, with $262 oil people will no longer be able to afford to drive their cars, the entire population of the planet will be forced to go back to riding horses and donkeys. Horses and donkeys eat corn and wheat so the demand and price will skyrocket.