The corn market trended higher this week with December corn flirting with the $7/bu. level this week. In addition, USDA lowered its expected yield by 5 bu./acre to 148.9, a significant reduction this early in the year.
Rain makes grain, they say, but too much moisture in the Corn Belt has delayed both planting and emergence, even flooding some fields. We’re approaching the trigger time when some some ground will be shifted out of corn.
While there’s been a lot of talk about a global food crisis, and increasing concerns about the subsidization of ethanol, it’s hard to fathom any substantive change in the ethanol policy. That means we’ll come out of this year with even lower ending stocks than a year ago, which would be the lowest level in more than a decade. However, there was good news this week with reports of production increases in China and Russia, and good prospects for the second corn crop in Brazil.
In looking back at market reports from a year ago, I noticed everyone was talking about the implications of $3.50/bu. corn. Who would have thought that we’d be talking double that price today?
My frequent rants about ethanol’s impacts on the cattle industry has gotten me added to the list for mailings from ethanol-industry apologists. It’s interesting that as the opposition to the ethanol giveaways becomes louder, the claims of the ethanol apologists become more shrill. In fact, I had to smile at the one this week asserting that corn prices would barely fall if the ethanol subsidies were ended today. If nothing else that should put a smile on your face during a difficult time.