10 November 2008 18:03 [Source: ICIS news]
HOUSTON (ICIS news)--The US Department of Agriculture (USDA) on Monday lowered its projection for US corn prices in the 2008-09 season, citing a drop in futures and cash prices for the key US ethanol feedstock.
The USDA reduced the forecast to $4.00-4.80/bushel (€3.12-3.74/bushel) in a monthly report for November. That range compares with $4.25-5.25/bushel one month earlier.
US corn prices averaged $4.20/bushel in 2007/08, according to estimates by the USDA.
The government said the decline in the futures market continued to undermine prospects for the season-average price to be received by US farmers.
US corn futures on Monday were largely steady from Friday at $3.78/bushel.
However, the front-month was down by 52% from about $8.00/bushel on 27 June when corn peaked due to fears that flooding in the US Midwest that month would compromise part of the crop.
The front-month was now trading around the same level it did one year ago.
The USDA kept corn production and ethanol corn usage projections largely steady with its previous report.
The government expects the US to produce about 12bn bushels of corn in 2008-09, a third of which will be used in ethanol production.
The US in 2007-08 used 3bn bushels of corn to make ethanol, 23% of a record 13.1bn-bushel corn harvest last year.
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