US corn prices plunge on higher crop projections
10 October 2008 15:36 [Source: ICIS news]
HOUSTON (ICIS news)--US corn prices fell sharply on Friday after the US Department of Agriculture (USDA) raised its crop projections for the key US ethanol feedstock.
Prompt corn in Chicago was down 24 cents/bushel at $4.13/bushel in early trading.
USDA said in a new monthly report that it expects the US to produce 12.20bn bushels of corn in the 2008/09 crop year. That projection compares with 12.07bn bushels in a September report.
The increase is due to higher beginning stocks and yield projections, which the USDA said more than offset a slight drop in the forecast for planted and harvested areas.
The government now expects US farmers to produce 154.0 bushels of corn/acre, up from 152.3 bushels/acre as projected in August.
Carryover stocks projections were raised by 48m bushels, while planted and harvested areas were reduced by 100,000 acres.
The USDA lowered its 2008/09 average corn price forecast by 80 cents/bushel to a range of $4.20-5.20/bushel (€3.10-3.80/bushel), citing sharp declines in futures and cash prices that “have dramatically reduced price prospects for corn”.
US corn prices peaked at nearly $7.90/bushel in late June after flooding in the US midwest that month stoked fears that part of the US corn crop would be compromised.
US corn prices as assessed by the USDA averaged $4.20/bushel in 2007/08.
The US in 2007/08 produced 13.1bn bushels in 2007/08, the record harvest by US farmers.
($1 = €0.73)
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By: William Lemos
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