15-05-06
The booming ethanol industry will consume 20 %
of this year's US corn crop, the government forecast, and soy-based biodiesel
also is taking off. Biofuels will bolster corn and soybean prices, the
Agriculture Department said in its first look at this year's crop harvest.
Voracious demand for corn from ethanol makers will help cut the corn (maize)
surplus in half by fall 2007, or 1.14 bn bushels.
"Renewable energy is making a difference" in the corn and soybean markets, said
USDA chief economist Keith Collins.
Some 2.15 bn bushels (54 mm tons) of this year's corn crop was projected to
go to ethanol plants, up 34 % from the 1.6 bn bushels (40.6 mm tons) now being
used yearly. $ A projected 2.3 bn lbs (1 bn kg) of soy oil would be used in
biodiesel in the year beginning Sept. 1, up 1.1 bn lbs (500 mm kg) from this
year.
"We may get $ 3 (a bushel) corn on the farm this year," said private consultant
John Schnittker, because of ethanol and a big demand for exports. It has been a
decade since the season-average farm gate price was that high.
Based on surveys of 14,800 wheat farmers and examination of wheat fields,
USDA forecast a winter wheat crop of 1.323 bn bushels (35 mm tons), down 12 %
from last year and the smallest crop since 2002 due to drought in the southern
Plains. Hard red winter wheat, the major flour class, would total 715 mm bushels
(19.5 mm tons), down 23 % from 2005 and smallest since 2002.
Schnittker said tight supplies would boost prices.
Source: www.planetark.com