Corn rallies on strong demand, supply outlooks

US grain and soybean futures rallied Wednesday, led by soaring corn prices on strong demand and supportive supply outlooks. Increased ethanol demand drove corn prices higher as producers continued to gobble up high-priced corn to make the biofuel. Ethanol production rose to 915,000 barrels a day last week, up 0.7 percent from the previous week and nine percent from a year earlier.

The rise in demand came as concerns intensify about shrinking supplies of corn, which are projected to reach a 15-year low before the next harvest. Grain users are increasingly paying higher prices for corn on the cash market than the futures market as supplies dwindle. The draw-down in ethanol stockpiles despite higher production is a reflection of strong corn demand, said Mike Zuzolo, president Global Commodity Analytics and Consulting in Lafayette, Ind. Corn is the primary input for ethanol production in the US. Read more ...

This blog is written by Martin Little, The Global Miller, published and supported by the GFMT Magazine and the International Milling Directory from Perendale Publishers