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How the harvest is looking

As the harvest is almost entirely in around the world. Its perhaps worth looking at how the UN's Food and Agriculture Organisation sees this year's harvest The good news for North American ethanol producers is that there was a bumper corn crop this year, the bad news is that demand is high and so are prices.

Export prices of maize that have remained volatile since February, when they reached a ten-year high of US$177 per tonne, have risen in the past two months. The United States yellow maize No 2 (Gulf, f.o.b) averaged US$171 per tonne in November, US$5 per tonne more than in the same period a year ago. Prices of maize reacted to recent downward revisions of the 2007 world coarse grains output, following completion of the maize harvest in the United States, which however is still a record crop. Despite this high level of production, the market remains tight mainly reflecting the continuing expansion of demand from the bio-fuel industry in the United States.

The FAO adds:

Strong maize prices, combined with shortages of feed wheat, have pushed up the values of most other feed grains.

Which is what you'd expect as people try to substitute cheaper grains for more expensive ones.

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