This morning, USDA released its most current estimate of corn inventories as o March 1 and took many in the ag markets by surprise. They reported a total of 6.52 billion bushels in storage, down from last year's number at this time of 7.694 billion and well below the average of analyst estimations at 6.70 billion.
With an increase in usage combined with these lower stocks, many are expecting USDA to now drop season-end supplies to a record low. Current projected ending levels are at a 15 year low, the equivalent of perhaps 18 days worth of corn needs.
Corn locked limit bid on the opening of pit session trade and has been stuck there ever since. As I write this, there is a pool of well over 278,000 orders to buy in the two front months alone!
The reason I mention this is because these extremely high corn prices are not shutting off demand and that means price will need to rise yet higher. Translation - get ready for a continuation of high meat and chicken prices for the remainder of the 2011 growing season not to mention the rise in prices associated with corn in all products employing it.
With gasoline prices shooting into new highs for the year along with a report that is pushing the price of corn, beans and wheat all higher, the beleaguered consumer is not going to get any respite from the surge in food and energy costs any time soon.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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