*Corn, wheat decline in profit-taking setback. CHICAGO, May 24- U.S. soybean futures fell on Friday for the first time in seven sessions and corn eased after two days of gains as investors squared positions ahead of the three-day U.S.
Arjuna Mahendran, MD & Head Investment Strategy Asia at HSBC Private Bank says that central banks are still fearful of cutting rates due to the risk of high inflation.
A drought-fueled rally in soybeans, corn and wheat is raising fears of another round of food price inflation, posing an unwelcome complication for policymakers, particularly in emerging Asia, where higher consumer prices may hinder their ability to ease monetary policy.
With nearly two-thirds of the US enduring drought conditions, food prices are expected to jump ahead of the November election. That could add to voter anxieties about the economy, the Christian Science Monitor reports.
Both corn and soybean prices have slid from Monday’s record highs and should be considered a buying opportunity if this pull-back continues in the short term, Erin FitzPatrick, Commodity Analyst at Rabobank, told CNBC.
The USDA slashed projections of corn production by a larger than expected amount, now predicting an average yield of 146 bushels an acre. "My concern is we're underestimating the scope of the problem," says Gulke, who also advises farmers on risk management tools like futures with The Gulke Group.
Gaurav Sodhi, Resources Analyst at Intelligent Investor says the impact of Norway's labor dispute on the energy markets has shown the lack of excess capacity in global supply.
Soft commodities such as soy and corn should be used by investors to protect against inflation in the same way as gold, according to the founding partner of GAIA Capital, John Coast Sullenger.
Greg Smith, Group CEO, Global Commodities Ltd says that speculators are still short commodities and that investors are not picking up on the protein theme yet.
A rising U.S. dollar is exerting major pressure on commodity prices and in turn could be setting up a prime buying opportunity in grains, energy and—yes—even gold.
Luke Chandler, Director of Agri Commodity Markets Research at Rabobank believes that Arabica coffee, oilseeds & old corn crop are most undervalued at the moment.
Tom Essaye, President, Kinsale Trading says while gold hasn't behaved like a safe haven, it could benefit from a worsening from the European debt crisis.