The historic U.S. drought caused corn prices to explode to record highs during the summer.
However, prices haven’t budged in a month and stands near $8/bu.
In his latest note, Morgan Stanley commodities guru Hussein Allidina reiterates his thesis that the corn price rally isn’t over. While the market continues to test what price will ration demand, it will eventually figure it out:
While many have cited recent weakness in ethanol production and exports as a sign that prices have risen enough to stanch demand, we expect that this weakness is only seasonal and these indicators should again tick up as the US harvests shifts into full gear.
We believe that price may have to trade into the double digits through the fall to shock the US and global livestock industry into contracting further in the coming months.
SEE ALSO: 11 Wild Facts About Corn >
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