The USDA is predicting that the 2007/2008 corn crop currently being harvested will set a new production record of 13.3 billion bushels. The record crop coupled with slightly slower start-up pace for new ethanol plants have led to the easing of corn prices to the $3.10 per bushel to $3.25 per bushel range in the corn belt this month. The USDA lowered its estimate by 100 million bushels for corn usage by the ethanol industry for the 2007/2008 marketing year.
Easing corn prices and a weak U.S. dollar have spurred U.S. corn and other coarse grain exports to levels above previous USDA projections. USA exports of corn are now expected by the USDA to increase by 100 million more bushels in 2007/2008, offsetting the reduction in the projected use by the ethanol industry. Poor grain harvests in some of the world’s other major grain producing countries and increased demand in India and China are fueling the increase in exports of corn and other grains from the USA.