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Economist on why corn price highs faded

corn kernelsA University of Illinois economist says corn futures prices that rose earlier this summer are not likely to rebound. Darrell Good says the increase of 90-cents a bushel from mid-June to mid-July had a couple of drivers. One was the June acreage report,“That showed that, we might have a few less corn acres planted than earlier thought. And that was in combination with ongoing record rainfall in the Eastern Corn Belt that some judged to be hurting our yield potential.”

Good tells Brownfield Ag News the second factor in the increase was the June 30th grain stocks report that showed less corn on hand than anticipated.

But, the price has come back down, about 70-cents on new crop corn futures, “People looking at the crop condition reports have been raising their yield and production expectations and that’s been reflected in the recent lower prices.”

Good says it looks like the corn supply will remain a factor, “Consumption has been moving along just about as has been expected. There are some ongoing demand concerns, I think, that stem from the financial markets, difficulties in Greece, difficulties in China, some weakness in our own stock market. But, for the most part, it has been driven on the supply side.”

He says there’s a bit of growing season left and some production forecasts to be released by the USDA, so the supply side will continue to dictate the market for the next two months. Good doesn’t expect corn to drop below mid-June’s low prices.

AUDIO:  Interview with Darrel Good (6:10 mp3):

 

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