Indiana Grain Company, LLC

Posted: 10/02/11

By: tomgrisafi

With Monday's trading limit for corn set at 60 cents, it could be a day for some big up or down moves in a market that is still reeling from Friday's limit down sell off.

U.S. corn futures plunged more than 6 percent on Friday, falling for the fifth week in a row after a government report showed a larger corn supply than expected and erased the need to ration demand with high prices.

As Reuters reports, "the spot corn price locked at the loss limit for most of the morning trading session, falling to the lowest point in 9-1/2 months and heading for its biggest monthly decline in nearly 15 years."

The slump could help pare costs for meat companies and ethanol producers, heavy users of corn, as the spot corn price is down about 26 percent lower than a record high of nearly $8 per bushel set in June, the report added.

"It is hard to believe that people are having a hard time finding corn if we really have 1.1 billion bushels," said Mark Schultz, the chief analyst at Northstar Commodity Investments Co in Minneapolis.

"It just doesn't quite seem to be realistic to me," he said.

Moreover, good corn demand from China remains supportive for corn futures, though it was doing little to help underpin the market Friday. The U.S. Grains Council said China could still import some 8 million tonnes of corn at the current 95 percent self-sufficiency target and the volume could jump to as much as 16 million tonnes if Beijing cut the target to 90 percent.

Source: Reuters

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