Whats driving corn prices?
Entering harvest, farmers expected to store their crop and wait for higher market prices. But in October USDA slashed its estimate of the Australian wheat harvest and trimmed the expected 2006 U.S. corn crop. Those moves propelled cash corn toward $3. Strong prices are predicted for the rest of 2006 and into 2007. The nation is harvesting an estimated 10.9 billion bushels of corn this year, second largest on record. “Even so, the U.S. corn crop is projected to fall a billion bushels short of expected market demand,” notes Bob Wisner, Iowa State University economist. This news, combined with a projected 34% rise in the amount of corn processed into ethanol this marketing year and an even larger potential increase next year, will likely keep corn prices quite volatile through spring. Corn must buy more acres Further increases in corn cash and futures prices appear likely at times this fall, winter and early next spring as the market tries to encourage farmers to plant at least 9% to 11%
