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

Demand to outstrip grain supply, traders say

Though the United States Department of Agriculture released negative numbers Thursday for the grain and soybean markets, sparking a fourth consecutive lower opening, a long-term trend of increasing world consumption provides favourable support for farm markets, analysts say. In a CME Group press briefing, instead of focusing on a current 'breaking' pattern for the grain and soybean markets, the panel addressed the increasing food demand of the world.

In fact, Scott Shellady, XFA currency and grain trader, says that using a 2 percent growth rate, the world's population double in about 35 years. "Further, of all the people ever born in this world, 15 percent of them are alive today. That is incredibly significant. And as that number rises, it's hard not to be bullish and not buy this market. It's shaping up to be a demand that we could have a hard time supplying." Read more ...

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