Market prices for corn and soybeans rose Tuesday following the latest crop report from the state agriculture department that shows planting in Iowa behind the five-year average. Northeast Iowa market analyst, Lou Arens says, there are a couple of other factors involved too.
Arens says a Dow Jones Newswire prediction that corn would hit five dollars a bushel by 2009, and a Goldman Sachs prediction of $4.50 corn by the end of the year also figured in the price increase. The ag report said 14 percent of the corn has been planted, compared to the five-year-average of 46 percent. Arens says the early lag in planting leaves a lot of questions.
Arens says a lot of the interest depends on how many acres of corn will eventually get planted and the demand for corn. Arens says the late planting comes at a time when the biofuels industry is booming. Arens says there’s a lot of debate as to how much ethanol demand there is and how much the fight over using corn for food or fuel is going to go on over the next few years. Arens says the Dow Jones prediction of five-dollar a bushel corn probably had a lot to do with that uncertainty. Arens is a market analyst for P-C-I Advisory Services in Waucoma.