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Corn prices rise sharply on revised crop estimate
meatingplace.com
USDA revised its 2006 corn production figure downward by 200 million bushels late last week, leading to a sharp run-up in price to nearly $4 a bushel.
The Chicago Board of Trade suspended trade in corn last Friday as the price rose 20 cents per bushel, the threshold at which trade is halted. Corn closed Friday at $3.965, its highest in over a decade.
Corn edged over the $4 level in the futures market, as contracts for delivery in July hit $4.14 per bushel.
USDA revised its final 2006 world corn figure to 10.535 billion bushels, down from its December estimate of 10.745 billion bushels, taking the market by surprise. Analysts say that world corn stocks are at an all-time low, as ethanol production and export demand have drained reserves.
Pork, cow/calf producers to suffer
Dale Durchholz, an analyst with Bloomington, Ill.-based AgriVisor Services, said the price may top $5 a bushel eventually, as increased demand worldwide as well as from the ethanol industry continue to push prices up. "We're looking at a new paradigm here with the energy component in the corn market," he told Meatingplace.com.
Pork producers and cow/calf operators are both going to suffer this year as a result of higher feed costs, Durchholz said. "Feedlots are just not going to pay for feeder cattle with grain costs so high," he said. Prices paid to cow/calf operators could drop as much as 20 percent in coming months, Durchholz warned.
The increased demand is going to result in significant increases in acreage devoted to corn in the 2009 marketing year, he predicted. "We'll reach 2.15 to 2.2 billion bushels this year, but its going to reach 3.7 billion, perhaps 4 billion next year," he says. That won't help the meat industry, though, because nearly all of that increase will go to the ethanol industry.
For more News Headlines, Commodity Quotes, Market Reports, Market Analysis and more, please visit http://www.teamauctionsales.com
meatingplace.com
USDA revised its 2006 corn production figure downward by 200 million bushels late last week, leading to a sharp run-up in price to nearly $4 a bushel.
The Chicago Board of Trade suspended trade in corn last Friday as the price rose 20 cents per bushel, the threshold at which trade is halted. Corn closed Friday at $3.965, its highest in over a decade.
Corn edged over the $4 level in the futures market, as contracts for delivery in July hit $4.14 per bushel.
USDA revised its final 2006 world corn figure to 10.535 billion bushels, down from its December estimate of 10.745 billion bushels, taking the market by surprise. Analysts say that world corn stocks are at an all-time low, as ethanol production and export demand have drained reserves.
Pork, cow/calf producers to suffer
Dale Durchholz, an analyst with Bloomington, Ill.-based AgriVisor Services, said the price may top $5 a bushel eventually, as increased demand worldwide as well as from the ethanol industry continue to push prices up. "We're looking at a new paradigm here with the energy component in the corn market," he told Meatingplace.com.
Pork producers and cow/calf operators are both going to suffer this year as a result of higher feed costs, Durchholz said. "Feedlots are just not going to pay for feeder cattle with grain costs so high," he said. Prices paid to cow/calf operators could drop as much as 20 percent in coming months, Durchholz warned.
The increased demand is going to result in significant increases in acreage devoted to corn in the 2009 marketing year, he predicted. "We'll reach 2.15 to 2.2 billion bushels this year, but its going to reach 3.7 billion, perhaps 4 billion next year," he says. That won't help the meat industry, though, because nearly all of that increase will go to the ethanol industry.
For more News Headlines, Commodity Quotes, Market Reports, Market Analysis and more, please visit http://www.teamauctionsales.com
