* Tight supply to send grain prices higher in Q1 2013 -bank
* Rising prices will slow demand, encourage production
* CBOT corn seen at $6 a bushel in Q4 13, wheat at $7
CHICAGO, Nov 28 Grain prices will climb in the
first half of 2013 and then beat a retreat as production
recovers from weather disasters and creates a global surplus,
Rabobank said on Wednesday.
Corn and soybean prices soared to record highs during the
summer as the worst U.S. drought in more than 50 years
devastated crops and tightened supplies.
Prices have since pulled back but need to move higher again
in the first quarter of 2013 to slow demand for limited
supplies, Rabobank said in an annual outlook report.
The jump in prices early next year will encourage farmers to
increase production, "resulting in a rebalancing of fundamentals
and weaker price outlook in the second half of 2013," the bank
Rabobank predicts CBOT corn prices will average $7.90 a
bushel in the first quarter and then fall 24 percent to $6
during the U.S. harvest in the fourth quarter. Front-month
December corn on Wednesday traded around $7.60 on the
Chicago Board of Trade.
Soybean prices are expected to average $14.75 in the first
quarter before sliding almost 12 percent to $13 in the fourth
quarter next year. Nearby January soybeans on Wednesday
traded around $14.45.
CBOT wheat prices are forecast to rise to $9.10 in the first
quarter of 2013 and then fall 23 percent to $7 by the fourth
quarter, according to Rabobank. Nearby December wheat on
Wednesday traded around $8.80.
In its outlook for 2012, Rabobank said, it underestimated
some prices by as much as 30 percent due to the unforeseen
impact of the drought in the United States, which accounts for
one-third of global corn exports.
A year ago, the bank forecast corn prices at the end of 2012
would average $6.10, wheat prices would average $5.95, and
soybean prices would average $12.51.
(Reporting By Tom Polansek; editing by Jim Marshall)