Why Corn is Hot

Phillip Futures Investment Analyst Ker Chung Yang in Singapore talked about why corn stocks are falling to the lowest level in a decade - due to strong export demand, increasing use of ethanol and steady buying by domestic livestock users. Growing middle class in Asia are switching to protein-rich diet, hence rising demand for corn as livestock feed, while ethanol is becoming more economically viable. Livestock producers switching from corn to wheat as corn is expensive, contributing to food inflation. Investors may opt to invest in grain futures, to play this theme. Corn prices have climbed to the highest since July 2008 on speculation that U.S. inventories will tighten as demand increases for food, livestock feed and fuel. On crude palm oil (CPO) for the next one week, he'll take cues from data release on coming Monday - MPOB March output stocks data, cargo surveyors issuing export estimates. 15% gain expected in output stocks due to good weather in Johor and Perak. CPO price has lost forty per cent since beginning of this year due to rising production. Support seen at RM3,200 per tonne level. See omnystudio.com/listener for privacy information.