Glencore International Plc and Bunge Ltd. expect lower prices for agricultural commodities in the coming season after the most severe drought in the U.S. since the 1930s drove corn and soybeans to records last year.
Farmers have boosted plantings and prices will “relax for a couple years” unless there is a weather disruption, Chris Mahoney, head of agriculture at Baar, Switzerland-based Glencore, told the Financial Times Global Commodities Summit in Lausanne, Switzerland, today. Crops in South America are “strong” and plantings in North America will be “big,” said Alberto Weisser, chief executive officer at White Plains, New York-based Bunge.
“If we get good weather, the world may get a breather on prices,” Weisser told the conference.
Corn, which reached a record $8.49 a bushel in August, declined 8 percent on the Chicago Board of Trade this year. Soybeans, which climbed to an all-time high of $17.89 a bushel in September, fell 2.6 percent since the start of 2013. Wheat is down 7.9 percent.
Brazil is projected to pass the U.S. as the top producer of soybeans for the first time in 2012-13, as it reaps a record 83.5 million metric tons, according to estimates by the U.S. Department of Agriculture. Argentina, the biggest shipper of soy-based animal feed and vegetable oil, may harvest 51.5 million tons, the USDA said on April 10.
U.S. farmers will boost area under corn to 97.282 million acres, the highest since 1936, the USDA said March 28. Total wheat acreage will be 56.44 million, up from 55.736 million last year, the USDA said.