Monday, January 12, 2009

Corn Plunges on Department of Agriculture's Projection of Larger Supplies

Corn fell to the lowest level allowd by the Chicago Board of Trade after the u.S Department of Agriculture said supply will be larger than originally projected in December.

Consequently corn futures dropped by the 30-cent limit to $3.8075 a bushel on the CBOT. That's closing in on the lowest price in two years experienced on December 5 of $3.055.

Corn inventories in the U.S. will come in at 1.79 billion bushels on August 31, a huge 21 percent more than the 1.474 billion bushels expected in December.

Estimates for the 2008 corn crop were also revised upward, adding another 0.7 percent to the total, while also cutting its projections for exports as well. As expected, production for animal feed and ethanol were also revised downward.

In 2007, corn in the U.S. was valued at $52.1 billion, the largest crop in the country.

Globally, corn levels will also increase from Decembers estimate, growing by 9.9 percent or 136 million tons.

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