Crops starting ‘long-term bull run’, Merrill says

Posted by Dave

December 24, 2009

Crop markets are at the start of a “long-term bull run”, Bank of America Merrill Lynch has said, joining investment bank peers such as Barclays Capital, Goldman Sachs and UBS in unveiling upbeat forecasts.

The worst recession for decades had not diminished the likelihood of economic expansion, coupled with a switch to more expensive diets in developing countries, providing “strong support” to demand for grains, meats and oilseeds.

The trend will put “upward pressure on prices in the medium term”, Merrill Lynch analyst Francisco Blanch said in a note revealing Merrill Lynch forecasts for 2010. And “of more concern” was that the crisis had not prompted a rebuilding in of food commodity inventories, most of which remained at “multi-decade” lows.