A reader writes:

Hi Jerry,

I've enjoyed reading your articles - very informative!

On Sunday's Nat'l Public Radio news it was reported that 32 millions bushels of corn would be rotting this year for lack of storage due to the over-surplus crop. Your articles make no mention of, and actually refute this.

I've tried to find some more concrete stats, but so far, nada. The table you have in your article looks like it would be great, but it's too small and not legible when I zoom on it. Any more references or light on the corn futures for 2008?

Thanks,
Scott
Ohio City (Cleveland)
GO TRIBE!!


Response:

Scott,

I'm not sure why the corn table data got distorted in the previous email, but you can go here to download the Excel spreadsheet with a full page sized version of this supply/demand table.

Concerning your question about the NPR story on spoilage, 32 million bushels does sound like alot of bushels, but when you consider that this year's corn crop was record output of 13.318 billion bushels, 1.5 billion bushels above the previous record crop in 2004, this one quarter of one percent (0.25%) of our supply being lost in the shuffle seems like a very reasonable level given total number bushels being handled this year.

In the fall of 2006, corn was the big leader in farm commodities because of a slightly smaller crop than expected and the substantial expansion in ethanol plant construction which was going to need additional output. This isn't the case this year after a 15 million acre jump in 2007 corn plantings and solid yields if not record corn yields this year. However, this market will need to stay competitive with soybeans and wheat on 2008 prices to avoid too many acres being switched to these other crops and possibly create another shortage in the future. Under this situation, I anticipate a trading range market with the nearby prices being $3.35 to $3.75 values.

Jerry