Corn and other ag commodities are headed higher again this morning
The bull run for corn and other agricultural commodities looks as though it will continue this morning after USDA lowered its estimate of ending stocks of corn by another 70 million bushels as of Sept. 1 to just 675 million bushels. The USDA raised its estimate of corn use for ethanol by 50 million bushels and use for corn sweetners by 20 million bushels. This news makes a tight suply situtation even tighter.
Grain, Soybeans May Rise as USDA Sees Tight Supply
Adding even more fuel to the fire, yesterday the United Nations warned that a drought in China could put additional on pressure wheat prices.
China drought could pressure wheat prices
China, the world's largest wheat producer, consumes almost all of what it grows and keeps roughly 55 million tons in reserve. But the prospect of a failed winter wheat crop might prompt the country to import grain on a scale that could put further stress on world prices, the U.N. Food and Agriculture Organization warned.
Both of these recent news items are good news for shareholders of seed and fertilizer companies and bad news for ethanol producers and people who eat food.