January 3, 2008

US corn prices collapse after purchase cancellation

US corn prices were on the setback last week for the first time in 18 months, following Algeria's cancellation of record demand of US corn at 5.1 million tonnes in addition to supply deficit in major corn markets, notably Ukraine and France due to adverse weather conditions.

The purchase halt has pulled down US corn prices from US$220 to US$180 a tonne in the last week of December.

Algeria has placed orders from February to March and along its purchase termination is also Egypt's demand cancellation of huge quantities due to high prices.

According to US investment firm Citigroup, although concerns about the cancellation of other confirmed orders because of the high prices on US markets abound, this will be averted in the next months as record harvests are expected in major-producing countries like Argentina, Australia, Kazakhstan and Switzerland.