Could Corn Hit $13 a Bushel?

Corn could hit $13 a bushel under a possible scenario outlined today by a market analyst during a teleconference for the Minneapolis Grain Exchange.

According to Joe Victor, Vice President/Marketing for Allendale, Inc., their current projection for the season average farm price this year is $6 per bushel for corn, compared to the 2007-2008 average of $4 per bushel – assuming excellent weather and average yield of 155.

“If we get into a weather situation, more of a wet weather scenario preventing us from planting, we could end up seeing a trend yield of 131 bushels per acre, which suggests a season average farm price of $13 a bushel.”

Victor says that based on the new acreage estimate of 86 million acres for corn, they project end stocks of 482 million bushels for 2009.

“Going from this present marketing year of 1.43 billion bushels, shaving near a billion bushels off that estimate. That’s going to keep people on the edge as far as, are we going to have enough corn? Not only corn for feed use, but the other monster that’s out there is ethanol,” Victor said.

However, the National Corn Growers Association points out that the acreage intention is still the second highest since 1949. “We’re always cautious when we review the March projections, because they are made before any seeds really enter the ground,” said Ron Litterer, NCGA president. “The corn acreage projections also have a tendency to go up. Last year, for example, there was a difference of more than 3 million acres between the March estimate and the final number.” Litterer pointed out USDA’s March report has underestimated actual corn acres in the each of the last four years.