Wednesday, March 10, 2010

Huge Corn Harvest Cuts Prices

Corn Inventory

Corn has suffered a similar fate as wheat, because exports are low and the harvest is high.

Corn exports are expected to fall by a huge 100 million bushels, as countries are successfully growing corn, and that is decreasing the demand globally, as it is with wheat.

The corn stockpile is projected to reach about 1.799 billion bushels after harvest, a major leap by 60 million bushels over the former estimate made by the USDA, which hasn't done a great job this year in accuracy, to say the least.

To put this into perspective, corn inventory has only surpassed 1.8 billion bushels four times in the last two decades.

Some are touting a resurgence in ethanol as a potential savior for corn in 2010, but that's very unlikely, as the economy is far from recovery, no matter what the official government line is.

Wheat is also expected to be cut back by about 10 percent in seeding next year for similar reasons as corn, but many of those farmers are expected to put that acreage into corn, putting more pressure on a larger harvest.

With corn exports continuing under pressure as other countries increasingly supply their own, and a slow economy not having the strength to push ethanol forward, I don't see a great year for corn in 2010 either.

Corn Inventory

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