corn price

[rambler]

The USDA planting intentions were released this morning.

Corn price is down the limit - 20 cents - this morning.

Some were worried that we couldn't produce enough corn in this country for the ethanol plants as well as food. Looks like we intend to plant an extra 15 million acres of corn. Assuming close to normal weather, that will more than take care of things.

Of course, weather issues will still make the corn go up & down on a wild ride. Could go back up again just as easy.

All other grain prices are also drifting downward today.

--_>Paul

[Jim S.]

Ah, the pin has finally come out to pop the bubble. All that's left to figure out now is, which will be the first farms to force-sell this fall? The thing won't really get going until next year, as far as fallout, anyway.

It's hard to be a market follower. By the time you find out and are getting in, the smart money has already been there and mostly left. And just wait til they can distill from grass, as Tennessee is researching!

Still, a slightly different take is below...

DES MOINES, Iowa (AP) -- An ethanol-fueled boom in prices will prompt American farmers to plant the most corn since the year the Allies invaded Normandy, but surging demand could mean consumers still may pay more for everything from chicken to cough syrup.

Farmers are expected to plant 90.5 million acres of corn, according to the U.S. Department of Agriculture's annual prospective plantings report released Friday. That would be a 15 percent increase over 2006 and the most corn planted since 1944.

Mother Nature will play a large part in the actual acreage planted. Muddy fields are already slowing plantings in some states.

"We're awfully wet out here," said John Scott, a grain farmer in west central Iowa. "Normally by this time of year we're doing quite a bit of field work. There just isn't a wheel turning out here. Illinois is in the same boat."

The move to plant corn is in large part due to a rush to produce corn-based ethanol, which is blended with gasoline. There are now 114 ethanol refineries nationwide and another 80 under construction.

The corn rush was sparked by President Bush's initiative to support for flexible-fuel vehicles, which are capable of using gasoline and ethanol blends, and his administration's plan to cut gas consumption by 20 percent in 10 years.

Corn prices were already rising when Bush announced the initiative in Washington on Jan. 23 and there has been growing concern that the corn rush could hurt the poor in less-developed nations such as Mexico, where the crop is a staple used in tortillas.

On Thursday, Cuban leader Fidel Castro wrote in an editorial for the Communist Party daily newspaper that President Bush's ethanol plan could deplete corn and other food stocks in developing nations, putting the lives of 3 billion people at risk worldwide.

"You're in the middle of an emergence of a food versus fuel debate," said Lincoln Ellis, director of asset management for the Linn Group, a Chicago-based privately held financial trading business focusing on commodities and futures. "This is the pregame show. We haven't even hit the first quarter."

Corn is a key ingredient in many foods, from corn syrup found in candies and cough syrup to feed used in meat production.

Chicken producers welcomed the planting report, hoping that an increased corn supply would reduce feed costs that have led to a 40 percent rise in chicken prices. But they noted that the bigger corn harvest would come at the expense of soybean acres, expected to drop by 11 percent.

"This is definitely a mixed report," Bill Roenigk, senior vice president and chief economist at the National Chicken Council, said in a statement.

Livestock and dairy producers also were optimistic that increased corn production could lead to a decline in feed prices. That presumption showed up in the stock prices for chicken producers on Friday. The shares of Pilgrim's Pride Corp., Tyson Foods Inc. and Sanderson Farms Inc. all rose after the news.

A bushel of corn for May delivery was trading at $3.74 a bushel Friday on the Chicago Board of Trade, down 20 cents from Thursday.

Agriculture industry analyst David Driscoll, of Citigroup Research, said in a report to investors Friday that he expects the increased corn acres to cause the price of corn to fall to about $3 a bushel by December.

Corn had been stuck at around $2 a bushel for years before the ethanol boom lifted prices.

Bob Ray, a senior vice president at the Chicago Board of Trade, said predictions that corn prices will continue to decline because of plentiful supply from a huge harvest must be balanced with increasing demand from the export market.

Both China and India have sent signals recently that they'll import significant amounts of U.S. corn. The Chinese can't raise enough corn to feed their rapidly growing livestock market and India has recently lowered tariffs, indicating plans to import grains from the United States.

A wild card also could be the European Union, which also has to meet required renewable fuel mandates and doesn't have enough land available to set aside for grains to make into ethanol.

John M.A. Roy, an ethanol analyst for WR Hambrecht and Co., predicts that ethanol demand will grow by at least 32 percent in 2007.

" Overall this was a good report for ethanol producers and could help their stocks short-term, but the issue of high priced corn is not over," Roy said in a research note.

The USDA based the planting report on surveys of more than 86,000 farmers across the country.

Increased corn planting also could mean a large drop in cotton production, expected to be down 20 percent from last year.

In Arkansas, for example, farmers intend to plant 66 percent more acres in corn. Cotton acres are expected to drop from 1.2 million acres last year to 740,000 acres this year. A similar drop in cotton acreage is expected in Mississippi.

In its report, the USDA said Iowa remains on top with the most corn acres to be planted at 13.9 million -- a 10.3 percent increase from last year.

Besides a drop in soybean and cotton plantings, rice was expected to decline 7 percent to 2.64 million acres.

Some grains are expected to rise. Wheat is expected to rise 5 percent with 60.3 million acres. Other increases include: sorghum, up 9 percent; canola, up 12 percent; and barley, up 7 percent.

Figures of actual acres planted for the year will be released on June 29.

[savinggrace]

I can't decide if I should buy now or wait?

I buy 6 mos of feed at a time; the pigs, chickens, turkeys, ect. all get the same mix (18% protein pig mix) and I modify it slightly to suit whomever I am feeding (turkeys a little more protein and the pigs get so many over ripe veggies it evens out I figure)

[Jim S.]

I quit feeding corn. Too high.

Price traditionally dips at harvest time.

[SquashNut]

Could cotton seed oil be used as a fuel. I wonder?

[Jim S.]

Man, I hope not. That's what I feed, cottonseed!

[arabian knight]

Originally Posted by SquashNut

Could cotton seed oil be used as a fuel. I wonder?

I think it already is being used just as well as soy beans are, BUT that is for Bio Diesel, Not ethanol fuels. We have 2 plants being built this summer in WI. To Use Soy beans, and soy oil, But these are going to produce Bio Diesel for Diesel vehicles, not automobile fuel as Ethanol Is being made for.

[Callieslamb]

My DH was driving through Illinois today on his way home from a business trip. He was listening to a local radio show and they said that the Illinois farmers are planting more corn alright - but that means planting a lot less wheat. I heard that prices of milk and milk products are supposed to go up 30-40 cents pre gallon by fall because of the rise in the price of corn. If there is less wheat, won't that price go up too? And won't that mean that everything made from wheat will go up in price too?

Doesn't look good for us that spend the money this year.
Most of what I buy has gone up in price in the last month or so anyway.

[SquashNut]

Wheat prices went up last fall, at least the hard red winter wheat did. I expect they will go up again.

[rambler]

You understand, all prices dropped today.

Corn down 20 cents a bu
Soybeans down 17 cents
Wheat down 23 cents
Oats, rice, ethanol - it all went down too.

Was kinda expecting corn to go down, beans to go up today.

So, there was no 'teeter totter' effect of one going up as others went down.

It all dropped.

Now, we have bad weather in May (too wet to plant, or too dry for crops in the fringe areas) and then prices will rise up again.

And, how that affects your feed costs - like gasoline & fertilizer and other things, once they go up it seems they are slow to drop,,,,,

But today - everything down. Corn went down it's limit, so it may be trying to go even lower on Monday? Just a guess. Other crops may bounce up a tad - again just a guess.

--->Paul

[seanmn]

I was reading that ethanol made from corn typically averages 150-300 gallons of ethanol per acre of corn and ethanol made from switchgrass or perhaps cornstalks typically averages 1300-1500 gallons per acre....seems foolish to keep building corn ethanol plants

[moonwolf]

consider also with the increased acrerage going to corn production, less acreage available for alfalfa hay production. Thus prices for hay will remain high, or go higher especially in drought stricken areas.

[haypoint]

I'd have to guess that the Switch grass lobby hasn't had the same effect in Washington that the corn lobby has had.
Historically, farmers increase product in anticipation of profits and create a glut and drive the prices into the cellar. If it goes that way, and there is every indication it will, other grains will drop along with corn. The grains farmers pick to feed livestock varies depending on price. If corn shoots up, more barley and oats are fed out allowing those graine to trail closly to corn's price. Same thing if corn tanks.
Right now there is a tight supply of quality hay. Last fall lots of marginal hay ground has been plowed up for corn production. I wouldn't worry too much about stocking up on corn, but I'd try like heck to lock in a price on this summer's hay crop. Good quality alfalfa is around $100 a ton in most states right now. I would think that in 12 months, excellent quality second cutting alfalfa will top $200 a ton, easily. While some farmers are mortgaging the farm to create the worlds largest corn glut, I'm looking at the crops that are cast aside to build the corn monoculture.

[Windy in Kansas]

Originally Posted by seanmn

I was reading that ethanol made from corn typically averages 150-300 gallons of ethanol per acre of corn and ethanol made from switchgrass or perhaps cornstalks typically averages 1300-1500 gallons per acre....seems foolish to keep building corn ethanol plants

Great post which gives something to think about.

Let me state right up front that I don't know the answer, but when one does compare ethanol production from corn and from switch grass it seems like a no brainer. HOWEVER what are the costs involved?

Can switch grass be harvested and processed for the same cost as corn? As an example only, does it perhaps take one truckload of corn kernels as opposed to twenty truckloads of switch grass residue?

Are the fertilizer needs (input for cost of crop) similar? I would expect corn to require more costly fertilizer as it would need more than just nitrogen.

Does switch grass take more processing, i.e. chopping, etc. to prepare it for the process of fermentation? Again, process one truckload vs. twenty?

Can switch grass be purchased in enough quantity to supply an ethanol plant even if farmers in an area switched crops?

What about storage requirements for each crop awaiting processing? Storing ten truckloads of corn or two hundred of switch grass residue would make a difference as to bottom line cost.

Is the spent mash from both crops easily disposed of? We know that corn mash is very well utilized for livestock feeding, can switch grass be used thusly?

Like I stated, I certainly don't know the answers but do know that one must look at the entire picture and bottom line when comparing apples and oranges for a particular use. On the surface one would think that switch grass could be grown on CRP acres to enhance corn production rather than replace it.

[Beeman]

Originally Posted by seanmn

I was reading that ethanol made from corn typically averages 150-300 gallons of ethanol per acre of corn and ethanol made from switchgrass or perhaps cornstalks typically averages 1300-1500 gallons per acre....seems foolish to keep building corn ethanol plants

Corn is going to bust a lot of people that thought they were going to get rich from it. Those that know how to play the system will profit.

The University Of Tennessee was doing research on switchgrass. One of the big advantages right off besides higher yield is continuous growth so multiple harvests. Add that to the fact it can be grown on the poorest land instead of the richest farmland and it makes it more attractive.

[tamatik]

Just read this morning that ethanol fuel is no better on emissions than regular fuel.maybe they,ll give up on the corn and leave it for the critters

[Rockin'B]

This is worth exactly what ya payed for it.... lol

I trade futures for a living and do it solely with chart technicals. I believe that this pullback in corn is a part of a large correction and expect to see all new highs coming down the road.

Price is reflecting a fundamental sea change in the long term supply demand picture and it all doesn't happen overnight.
Remember, the pendulum doesn't swing back directly to the center.......

[ladycat]

Originally Posted by Windy in Kansas

Is the spent mash from both crops easily disposed of? We know that corn mash is very well utilized for livestock feeding, can switch grass be used thusly?

I read an article the other day that said feedlots are springing up near some of the ethanol plants to take advantage of the expected abundant supply of the spent mash.

[moonwolf]

Originally Posted by Windy in Kansas

Does switch grass take more processing, i.e. chopping, etc. to prepare it for the process of fermentation?

We know that corn mash is very well utilized for livestock feeding, can switch grass be used thusly?

.

From reading a bit about it, my understanding is that cellulose conversion to ethanol in switchgrass isn't quite perfected to be efficient and economical, but it's coming in the next few years. My understanding is that any 'residue' of switchgrass is used as biogenerating fuel to operate the switchgrass ethanol producing plants... or moved to another site that would buy and use the biomass as fuel.

[tinknal]

Originally Posted by seanmn

I was reading that ethanol made from corn typically averages 150-300 gallons of ethanol per acre of corn and ethanol made from switchgrass or perhaps cornstalks typically averages 1300-1500 gallons per acre....seems foolish to keep building corn ethanol plants

The actual distilling process is exactly the same. As soon as the technology exixts to ferment the mash it should be a simple matter of adding it to existing plants.