Mother Nature wreaked havoc on producers of agricultural commodities in 2009 and gave the food market a jolt, sending prices for staples like corn and soybeans on a wild ride only to end the year close to where they started, according to the Wall Street Journal.
Last year was characterized by extremes and overall greater attention to weather, reported the WSJ.
“There is much more sensitivity to weather extremes or abnormalities than I have seen in past years,” said Richard Feltes, head of commodities research at MF Global, a Chicago-based brokerage company.
At the end of the year, corn prices were up 2 percent to $4.145 a bushel at the Chicago Board of Trade, wheat was down 11 percent to $5.415 a bushel, and soybeans gained 7 percent to $10.3975 a bushel. Rough rice lost 5 percent.
For 2010, corn is likely to be the price leader due mainly to higher ethanol mandates in the U.S. that could use up to one-third of the total U.S. corn supply.
The outlook for soybeans hinges on the production outlook in the U.S., said Anne Frick, a soybeans analyst at Prudential Bache Commodities. Currently, South America looks to have a record-high crop year in 2010. Absent an unexpected bout of poor weather in the U.S., the increase in world supply will exceed demand.