Corn prices plunge on record corn forecast

Biofuels submits:The ethanol market this week will focus on:

James Cordier submits:There had been whispers all summer about dry weather across the US Midwest hampering corn yields this fall. But few expected the sharp reduction in yields and ending stocks reported by the USDA in Friday’s monthly supply/demand report.The USDA reports the average yield per acre for this year’s US corn crop will drop to 155.8 bushels of corn as compared to last month’s estimate of 162.5 bushels per acre.

By T. Marc Schober:The USDA continued their streak of surprises by increasing ending corn stocks for 2011/12, despite analysts projecting a reduction in domestic corn supplies. The May WASDE also produced the first official projections for 2012/13, with a record high corn yield of 166 bushels. Domestic soybean stocks continue to dwindle as the usage ratio will be at a historically low rate due to increased U.S. exports and decreased South American production. Corn

The price of corn is at all all-time high because of extreme drought conditions in the US coupled with the hottest July temperatures since records began 117 years ago. Inane Policies

By T. Marc Schober:The USDA updated the U.S. and world balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates report today. No major changes in December’s report, but the USDA did lower expected prices for commodities, including a 30 cent reduction for corn prices in 2011/12. Corn

Biofuels submits:Fresh rally in corn prices to 2-year high further boosts profit risks for ethanol producers -- Ethanol prices in the past three months have now rallied by a total of 50%, just slightly below the overall 54% rally in corn prices. The ability of ethanol prices to keep pace with the corn rally has preserved most of the profit margin for corn-based ethanol producers.

By The Mays Report: By G.C. Mays

America's 2012 corn growing season was about as bad as it gets thanks to record droughts.