Corn Rationing Needs to Begin

Fran Howard
Agweb

The corn market is extremely tight heading into the New Year, and analysts expect short supplies and heavy use to keep upward pressure on corn prices in 2011.  

"The corn market has one job and one job only—to go high enough to make people stop using the product," says Ryan Turner, risk management consultant for FCStone, Kansas City. "We are past the point of encouraging more supply." Turner predicts 2011 corn futures prices will exceed 2008 highs. "I don’t know if it will happen in January or June, but it will happen," he says.


Soaring corn prices will slice into demand, with corn exports expected to fall first followed by feed usage. Analysts anticipate the cattle industry to begin rationing earlier than other livestock sectors due to poor margins, but rationing in poultry, hog, and dairy will be close behind. "It will be very painful," Turner adds.
        
USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) put the carryout for the 2010-11 U.S. corn crop at 832 million bushels, less than half the previous year’s carryout of 1.7 billion bushels. USDA pegs the average U.S. farm price for the 2010-11 crop at $4.80 to $5.60/bu. World supplies have also tightened: USDA’s latest estimate for world ending stocks for the 2010-11 crop is 130 million metric tons, a nearly 12 percent drop from the previous year’s 147 million metric tons.
        
Looking ahead to the 2011-12 crop, Chad Hart, agricultural economist with Iowa State University, calculates the full cost to grow corn in Iowa will be $4.25 to $4.50/bu., but revenues will be more than $5/bu., leaving at least a 50-cent-per-bushel margin. "That’s a really good margin, similar to 2007-08, when the first big push in ethanol occurred," says Hart.

Read Full Article

Enter your email address to subscribe to our newsletter:


Delivered by FeedBurner

Oil, gold, corn...oh my! Commodity prices on a tear

Blake Ellis
CNN

NEW YORK (CNNMoney.com) -- Commodity prices are surging across the board as the U.S. dollar remains under pressure from building speculation that the Federal Reserve is about to take action to aid the stumbling economy.

Oil and gold prices have been on a tear this month. After jumping 1.5% last week, crude prices spiked more than 1% again Wednesday. And gold continued it's record-breaking streak, surging nearly 2% to settle at a new record high of $1,370.50 an ounce.

Meanwhile, the Reuters-Jefferies CRB index, a key benchmark for global commodities, surged to its highest level since 2008.

Grains and soft commodities like corn, sugar, cocoa, coffee and cotton were also in the thick of the buying frenzy, with prices continuing to hover at yearly highs. (Track commodity prices)

"I really haven't seen prices like this since the early 1980s," said Dan Flynn, an energy trader at PFG Best. "A real cause and effect is trickling down into the markets based on low supply, high demand and a weaker dollar."

Read Full Article

RELATED ARTCILE:
Banksters Inflate Speculative Food Bubble, UN Offers Global Governance Solution

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page

U.S. Corn Yields May Drop More Than Forecast, Biggest Farm Manager Says

Jeff Wilson
Bloomberg

U.S. corn yields may fall 5 percent this year, more than analysts forecast, because of adverse weather, according to Farmers National Co., the largest manager of crop land.

Yields may drop to 156.6 bushel an acre, said Jerry Warner, the chief management officer at Farmers National who helps oversee 2.5 million acres. That’s down from a record 164.7 bushels last year, and lower than the Department of Agriculture’s September forecast of 162.5 bushels. The USDA is scheduled to update its outlook tomorrow. Analysts surveyed by Bloomberg expect the agency to cut its estimate to 160.2 bushels.

“National corn yields may be down 5 percent based on harvest results we are seeing” from fields across the Midwest, Warner said from Omaha, Nebraska. “It’s a significant drop, because there a lot of yields dropping more than 10 percent,” including in Iowa and Illinois, the two biggest producing states, he said.

Before today, corn futures surged 38 percent since June 1 on signs of a smaller crop. On Sept. 30, the USDA said inventories were 322 million bushels higher than estimated earlier that month. The next day, prices plunged 6.1 percent, the most since January.

Read Full Article

RELATED ARTICLE:
Banksters Inflate Speculative Food Bubble, UN Offers Global Governance Solution

Fresh food that lasts from eFoods Direct (Ad)

Live Superfoods It is time to Wake Up! You too, can join the "Global Political Awakening"!

Print this page