Corn supply in the world; CUTC Conference in Dallas

Corn supply in the world

The week’s highlights are:

• Corn futures are down 17.5 cents per bushel ($6.7 per MT) from last Friday’s close
• Corn and barley plantings are 100% complete
• 71 percent of the U.S. corn crop is in good-to-excellent condition
• Weather: rain is moving across the cornbelt this weekend which is expected to keep the crop on pace for a high yield potential.
• FOB Corn US Gulf 111.40 per MT
• Latest WASDE highlights:

Corn production: 268 Million Metric Tons (down from last year’s 282 MMT)
Corn exports: 54.6 Million Metric Tons (up from last year’s 52.7 MMT)
Ethanol use: 54.6 MMT (up from last year’s 40.6 MMT; equal to exports this year)
Ending stocks: 29 MMT (down from 55.2 MMT)
Average farm price: $2.25-$2.65 per bushel ($88 – $104 per MT). Farm prices are up from last year’s averages of $76-$80 per MT.

Proexporter Network, an analyst company has predicted corn production of 10717 million bushels (272 MMT) in 2006-07 of which 9495 million bushels (241 MMT) are expected to be used in US. Ethanol production is expected to utilize 2166 million bushels (55 MMT) of corn (1665 million bushels – 42 MMT in dry mills and 501 million bushels – 12.72 MMT in wet mills), producing 5931 million gallons (22537 million liters) of ethanol in 2006-07. The Proexporter network has also predicted the US farm price to be average at $ 92.89 per MT.

The production of 272 MMT is expected from 71.427 million ha for land in 2006-07 with an average productivity of 3.81 tons/hac. The total area to be harvested is lower than last year’s 75.107 million hac, but the productivity is higher than last year’s 3.76 tons/ha.

The prices of corn in US came down and CBOT closed at $95.25 per MT for July delivery.

CUTC Conference in Dallas

The contingent from India attended the CUTC conference in Dallas, USA. The team attended the technical sessions on dry milling, wet milling which were aimed at providing information to the participants on increasing efficiency of production at their starch mills.

The team also visiting an ethanol plant, crushing 1400 tons of corn per day. The ethanol plant Big River Resources, is a co-operative and has plans to double the capacity of the plant within next 8 months. There are currently 100 ethanol plants in US and about 40 more will be coming in production in next 18 months, thus limiting the dependence of US on foreign oil. Ethanol is probably one of the best way to harness solar energy into fuel though the corn plant.

The team also visited a barge facility, where speciality grains like High Oil Corn, High Extractable Starch, Non GM corn are handled. The facility also boasts of one of the largest natural storage areas which are being used by the company. Corn is stored in a 60 acre unused sand silica mine and the company can store 0.25 MMT of corn in this storage.

The team also visited a farmer growing corn and soya on 3000 acres of land. The farmer grows corn on 1500 acres of land and is expecting a production of 4.57 tons/acre. The production on soya is expected to be 1.36 tons/acre.

Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com

Jun 10, 2006