Rabo AgriFinance Agricultural Economist Sterling Liddell expects that strong demand will support corn prices late into 2010 and early 2011, which could give support to wheat prices. “Currently, wheat stocks are approaching burdensome levels.”

Ending stocks in soybeans are improving from precipitously low levels, Liddell said at Brock Decision 2010 Seminar in Memphis, “but strong demand makes prices vulnerable to supply shocks.” He says recovery in South American soybean supply and a buildup in U.S. ending stocks in 2010-2011 should weaken markets next year.

Liddell says population growth in China and India is the driving fundamental for U.S. agricultural commodities and this will continue, especially in feed. “The question is whether China can produce enough feed to produce enough pork to feed their population. Whether China’s recent purchase of U.S. corn is a result of changing in Chinese buying habits remains to be seen.”