WASDE: Corn cash, future prices remain strong

By Erin Voegele | July 08, 2008
Web exclusive posted July 11, 2008 at 3:51 p.m. CST

In the July 11 World Agriculture Supply and Demand Estimate report, the USDA reports that the 2008-09 marketing year average price for corn received by producers is projected to be $5.50 to $6.50 per bushel, up $0.20 on each end of the range. High soybean prices are expected to drive up the competition for 2009 acreage, keeping corn cash and future prices relatively strong, but below recent record levels.

U.S. 2008-09 corn ending stocks are projected to be higher this month as higher carryin and reductions in food, seed and industrial use offset lower production and higher feed and residual use. The report lists that the harvested area has been raised 100,000 acres based on the June 30 Acreage Report. However, production is projected to be 20 million bushels lower, now estimated to be 11.7 billion, as the projected per acres yield is lowered to 0.5 bushels. Heavy June rains and flooding reduced the share of harvested areas in the higher-yielding Corn Belt states. Feed and residual use for 2008-09 is up 50 million bushels based on higher expected pork and poultry production in the first half of the 2008-09 marketing year. Food, seed and industrial use is lowered 65 million bushels, which is in line with changes to the 2007-08 marketing year. Ending stocks are projected 160 million bushels higher, at 833 million.

Ending stocks for 2007-08 are projected 165 million bushels higher, with food, seed and industrial use lowered 65 million bushels, and feed and residual use lowered 100 million bushels. Based on reported delays in plant startups and construction, as well as lower than expected plant capacities indicated by the most recent ethanol production data, ethanol corn use for 2007-08 is lowered 50 million bushels. The 2007-08 marketing year price for corn is unchanged this month at $4.25 to $4.45 per bushel.