Indiana Grain Company, LLC

Posted: 08/26/09

By: tomgrisafi

We've come a long way since last summer's $8 corn.

But the price of corn now and where it will be a few months from now is anyone's guess, despite data foreshadowing one of the largest corn crops on record.

"Corn is in a very interesting situation," said Darin Newsom, senior analyst for DTN.

He told the Chicago Tribune that "the question is whether the demand-driven market that exploded in mid-2006 can continue to sustain itself if the crop fulfills such high expectations."

The U.S. Department of Agriculture has pegged the corn crop to be 12.8 billion bushels, which would be behind only the 2007 record crop of 13 billion bushels.

A farmer who is a longtime national industry leader said prices and supply have put corn in a position to benefit both the producers and buyers.

"It's pretty well balanced out," said Ken McCauley, a past president of the National Corn Growers Association.

Prices for December Corn futures are trading for less than $3.30 a bushel.

"Corn is more reasonable than a year ago," McCauley said, referring to prices that reached $8. "That's good for the ethanol and livestock folks."

The USDA has increased its forecasts for demand for the marketing year of Sept. 1 through Aug. 31, 2010.

The large crop is projected in a year when the number of acres planted is down: 6.5 million fewer acres in the U.S. than in 2007. But this year's crop continues to benefit from improved seeds and an ideal growing season for much of the corn belt.

Source: Chicago Tribune

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