About this time a year ago, nearby corn futures on the Chicago Board of Trade were trading at $5.67 a bushel — and headed higher. Today, it appears prices are headed in the opposite direction. The global economic recession has had a negative impact on grain prices, which is good news for livestock producers.
One veteran grain-trader, Bill Gary, president of Commodity Information System, told Bloomberg.com that cash prices for corn could tumble below $2.50 a bushel this year. “This recession is going to last a lot longer than the one in the 1970s,” hurting demand for raw materials,
Demand for corn is falling. When corn prices fall, it affects most every other commodity in a similar manner, he adds.
USDA expects farmers to plant 1 percent fewer corn acres this year than they planted in 2008. According to USDA's March 31 Prospective Plantings Report, growers say they will plant 85 million acres of corn this year. If so, that would be the third-largest acreage in the past 60 years, behind 2007 and 2008.
Click here to listen to an AgriTalk radio interview with Doane Senior Economist Rich Pottorff, who discusses the Prospective Plantings Report.
Meanwhile, soybean growers say they will plant 76 million acres. If realized, it would be the largest planted area on record, just ahead of the 75.5 million acres planted last year.
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Source: Bloomberg.com; USDA-NASS