Such a forecast provides little supply/demand rationale for 2007/08 New York futures to trade much significantly higher or lower than 2006/07 (i.e., similar trading ranges for respective futures contracts).
Having said that, I could see Dec07 futures reaching 65 cents during the period of uncertainty around planting (for example, fueled by bullish buzz about low plantings before the actual planted acreage is known).
Then I can envision a sideways trend into the summer and eventually trend back down below 60 cents as the market perceives that 1) higher prices have bought more actual acres than originally intended, and b) even historically low plantings don't necessarily translate into stock-reducing, price supporting short supplies. (That's assuming we have better growing conditions than during 2006.)
For the week ending February 2, Dec07 futures traded in just under one cent range between about 59.15 and 6010. This is shown as the red line in the seasonal graph. Depending on whether 2007/08 is in fact a reduced carryover year (purple line) or another stable carryover year (green line), Dec07 could follow a stronger or more negligible 1st quarter price rally.
Texas A&M University, USA
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