November 1, 2011

Iowa's corn price up 60% in October

The price of corn has increased to more than 60% in October due to the drought in Iowa as well as the farmers' reluctance to sell the newly harvested corn.

According to USDA, the farmers have storage capacity of more than two billion bushels which means majority of the expected yield of 2.4 billion bushel crop in 2011.

Earlier in October the corn dipped below US$6 after USDA issued the unexpectedly high numbers for domestic corn stocks. But the yield robbing dry weather conditions in the region has pushed the price of the corn to a month high of US$6.55 from US$5.90 per bushel. According to an agronomy meteorologist of Iowa State University, the dry soil conditions in the western Corn Belt is said to increase the drought risk.

According to USDA reports, US corn yields are expected to fall to 145.9 bushels per acre, down from 148.1, and soy yields are expected to fall to 41 bushels per acre down 41.8 bushels per hectare. On Friday (Oct 28), the December corn on the CBOT closed US$0.03 up.