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COMMODITY INSIGHT
GENERAL OUTLOOK
Prepared by Commodity Insight
The August Crop Production report was very bullish for corn. If the government crop estimate is correct, corn prices should rise to $2.90 to $3.10 a bushel immediately. But that is just part of the picture about to emerge this year for the corn market specifically and the grain complex in general.
This year's corn crop has been reduced by Mother Nature to the point that stocks will not rise for another year. Actually, this year we will consume more corn than we produce. It will not be until the 1998-99 crop year that stocks of corn in this country will be in a position to rise.
But there's more. Also thanks to Mother Nature, China is in the midst of its worst drought in 80 years. If China has to become an importer of corn this year or additional crop problems arise anywhere in the world where feed grains are produced, $4.00 a bushel corn prices cannot be ruled out.
Please understand that the situation in the corn market is about as bullish as can be. And another problem here or there, could lead to a gargantuan rise in grain prices between now and the fall of 1998.
August 14, 1997Jerry F. Welch, Publisher
Commodity Insight
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