Corn and cotton may outperform oil this year as demand from China and alternative fuels gain, Barclays Capital said on 19 February.
“Cotton has a very strong story, demand from China is increasing,” Paul Horsnell, head of commodities research at Barclays Capital, said in an interview at a press briefing in London today. Corn prices “will be supported by the ethanol story,” he said. Barclays Capital is the investment-banking arm of the UK third-largest lender.We feel more positive about agricultural commodities than we have done for awhile,” Horsnell said.
Corn futures surged almost 81 % on the Chicago Mercantile Exchange last year on increased demand for grain to make ethanol, an alternative fuel, and to feed livestock. Cotton climbed 3.7 % while oil prices were little changed after reaching a record in July.Oil prices in New York may average $66 a barrel this year, Horsnell forecast. Oil averaged $66.25 a barrel last year.