October 19, 2006

Corn boom gaining force

Projections of a booming US corn market was what Pat Steiner, brand manager of mesotrione products for Syngenta Crop Production kept looking forward to when in February 2005, USDA report showed a fairly constant use of corn via exports; ethanol; food, seed and industrial use; and feed and residual use.

Nothing materialised, said Steiner while addressing a media summit.

Things changed after a September 2006 Des Moines Register article that quoted Keith Collins, USDA chief economist, predicted US farmers would plant 90 million corn acres by 2010, over 11 million more acres than were planted this year.

That news coincided with a roaring corn bull market this fall with ethanol being a key driving force. Steiner referred to a chart by The ProExporter Network (PRX), Olathe, Kansas, showing ethanol consumption more than doubling from 2006 to 2009 and beyond.

For many like Steiner, the news of ethanol having a major market meant producing 82-85 million acres of corn. The unprecedented growth in corn acres to 90 million acres certainly exceeded their expectations.

Referring to a PRX chart, Steiner said corn prices would be hitting US$5 per bushel by the start of next decade, and that, is only the average price.