July 26, 2011

US corn to end higher this year

US corn prices will probably close higher this year than expected previously, according to a Reuters Poll of analysts, indicating persistent demand from livestock and ethanol industry, as well as anxiety over crop harvests.

The survey of 12 traders and analysts reflected spot corn futures <Cc1> on CBOT ending the year at US$6.89/bushel, about 16% more than the forecast given by analysts polled at the start of 2011. The expected year-end price would be almost 10% more than last December but far away from the record high of approximately US$8 determined in June.

On Monday (Jul 25), CBOT spot corn futures <Cc1> were 15 cents less at US$6.75/bushel. The March <CH2> contract which will be the spot contract at the end of the year was down 15-3/4 cents at US$6.82-1/2.

The analysts said persistent demand for corn from the livestock and ethanol industry and probable damage to crop from unfavourable weather in the Midwest could lower harvests will cause corn prices to increase further.