June 28, 2007

US corn prices likely to trade US$3.85-4.30/bushel next three months
 

Corn prices are likely to trade in the US$3.75-4.30/bushel range in the next three months as planting continues in the US, Kimberly Rameker, regional director (South-east Asia) for the farmers lobby group US Grains Council, said Thursday (Jun 28) on the sidelines of the Grain Shipping conference.

Harvesting of corn in the US will likely begin in late September.

On Wednesday, the spot month corn contract on the Chicago Board of Trade settled 12 3/4 cents lower at US$3.43 3/4 per bushel.

She said that once harvesting begins, prices would depend on how the final yield of the crop has shaped up.

However, she said that in the mid- to long-term (12-18 months), ethanol demand would continue to keep corn prices supported.

Rameker said her personal opinion is that buyers should consider it a very good buy if corn prices are below US$3.85/bushel.

Of course, the major reason for the well-supported corn price is demand from US ethanol plants. Rameker said that with the current level of subsidies being given to these plants and crude prices above US$60/barrel, ethanol output would not be affected at all as long as corn stays below US$4.50/bushel.