Burgeoning demand, coupled with last year’s Russian grain crisis, floods in China and Pakistan, dry weather in Argentina, and other crop adversities have sharply reduced supplies of major agricultural commodities, pointing to “a need for more planted acres in 2011,” says Steve Freed.

Barring another meltdown in the economy, commodity prices “probably won’t trade much below current levels” near term, says Freed, vice president of commodity market research for ADM Investor Services, who gave his insight on grain markets at the Mississippi Farm Bureau Federation’s Winter Commodity Conference at Jackson.

“Most economists feel we don’t have enough acres to plant in the U.S. to satisfy demand,” he says.

“If you ask traders in Chicago what they think will be a roadmap for prices in 2011, they say 2008. If we lay the 2011 chart over 2008, from a price standpoint and a timing standpoint, we’re almost following the 2008 markets one for one. There’s no guarantee we’ll continue to follow them, but 2008 is the roadmap everyone’s looking at.”

Looking at historical trends, Freed says, over the last four years from mid-January to the peak of the market later in the year soybeans saw about a 60 percent to 70 percent rally and a $14-level price. “A similar percent rally in 2011 could mean $18 beans. A similar rally, mid-January to the high, would put corn around $7.80, and wheat somewhere around $9 to $9.50.

“Right now, soybeans are now the bull leader, and some economists are saying supplies are going to be really tight at the end of this year and into 2012.” The January USDA report was bullish, he noted, particularly for beans.