US corn prices may plummet 23%

US corn may drop as much as 23% from current prices in the last four months of the year as the US harvest boosts supply, said Joe F. Sanderson Jr., chief executive officer of Sanderson Farms Inc.

Corn may trade between US$2.80 and US$3.20 a bushel from September through December in Chicago, barring any unforeseen weather that harms crops in the US or China, according to Sanderson.

Corn futures for July delivery fell 6.75 cents, or 1.8%, to US$3.6425 a bushel on the Chicago Board of Trade. Most-active futures have dropped 12% this year.

Prices may not decline if weather hurts the corn crop in China, the second-biggest consumer of the grain, and if that country boosts imports, Sanderson said.

Sanderson Farms' net income rose to US$35.1 million, or US$1.62 a share, in the three months through April from US$26.2 million, or US$1.25, a year earlier, the company said today in a statement. Six analysts on average estimated per-share profit of $1.47 in a Bloomberg survey. Sales rose 14% to US$487.1 million amid rising demand at grocery stores, the company said.

Sanderson also said the poultry industry may see some consolidation and assets change hand.

Meanwhile, Sanderson Farms is focusing on building two plants in South Carolina rather than acquisitions, he said.