Watching the corn market: Say it ain’t so Joe!
It is unlikely that the use of corn to produce ethanol will increase much above current expectations; probably more likely to fall short than exceed current expectations.
In addition, suppose livestock disease problems reduce annual feed demand during the 2013 and 2014 crop years by 300 million bushels or so below 2013 crop year expectations.
If much of this were to happen, by 2014 the year-ending stocks of corn could easily break past 2.5 billion bushels. With that size carry-over, the corn price would continue its fall heading toward the variable cost of production.
If above-trend harvests appear in the 2015 crop year, could we see $2.00 corn?
Say it ain’t so Joe!
Source: Daryll E. Ray and Harwood D. Schaffer, Agricultural Policy Analysis Center, University of Tennessee