Sep 18, 2014
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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Reasons Corn Prices Stay Supported

Feb 13, 2014

Corn bulls can find some relief in the fact the recent slump in ethanol production was broken as output was up last week. The fact that stocks rose slightly is easy to explain away on bad weather and lack of movement, margins are still extremely profitable.  Ethanol exports also continue to help drive demand with Canada, Brazil, India and the Philippines taking US supplies. While China, Mexico and South Korea continue to scoop up US made DDGs. Another bright spot that seems somewhat buried in the news is that the UK has substantially increased corn imports as a substitute for feed wheat. December imports were up 74% year on year, the highest amount on records that date back some 20-years. Corn is also gaining fans among the UK’s bioethanol plants who are beginning to discover its value as a by-product, such as DDGs. Lets also keep in mind political unrest in both Argentina and Ukraine, along with Brazil shifting more focus to soybeans, makes the US the worlds primary supplier of corn at this juncture. However, the one kicker that continues to keep the trade concerned is obviously the Chinese rejection of US corn.  Remember there was optimism and hope early on that this was the year China moved towards a more "quantity" buyer of corn.  Sorry, that simply doesn't look to be the case this year.  With the Chinese hype looking as if its off the board, its going to take bullish US weather headlines to give us a boost.  Click here to get my daily grain comments...

Chinese Demand??? There has been some question as of late in regard to Chinese demand, especially when reports indicate industrial use of corn in China fell last year by almost 2% to 191 million metric tons. Most in the trade attribute the setback to poultry running into major headwinds associated with the bird-flu.  Several sources reporting broiler feed demand was off by over 7%.  There are also some questions being raised as of late in regard to profit margins on the pork side of the equation.  With hog prices taking a tumble margins are in the red. In other words its tough to expand your herd when you are loosing a fortune on each pig...Click for my daily report...

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