Global Grain Production up, Commodities Traders Down
The United Nations’ Food & Agriculture Organization (FAO) reported today that global grain production will be much more robust than initial estimates. Citing improved crop yields from Canada to China to the European Union, the FAO’s report estimates that total output of grains, including wheat, rice, corn and barley, will be 2.498 billion metric tons, about .3 percent higher than originally forecast. According to the Chicago Board of Trade, futures’ prices for some of these commodities have already tumbled as much as 40 percent, and this new news will only exacerbate that slide. With the U.S. Department of Agriculture set to update its estimates for domestic and grain supplies tomorrow, investors may want to consider shorting commodities prices.