Monthly Grains Update

December corn has rounded in recent weeks to set up a gain of 17.7% over the month. We expect that prices have found a cyclical bottom and that a looming global deficit of 0.8mn tonnes in 2010 will buoy prices in coming months. We have downwardly revised this projected deficit from 8.9mn tonnes previously. However, the remarkably slow pace of the current US corn harvest is also serving to underpin prices. This supportive medium-term picture for corn is reflected by our forecast for an average price of USc450/bushel in 2010. We have also extended our forecasts out to 2011, when

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