Are higher corn prices needed?
Published: Nov. 1, 2010 Source: Darrel Good, 217-333-4716, d-good@illinois.eduURBANA – December 2010 corn futures moved above $5.00 in mid-September, moderated in early October, and then moved sharply higher following the USDA’s October Crop Production report. The month of November started with new highs for that contract, said Darrel Good, a University of Illinois agricultural economist. “Even though prices are at the highest level since July 2008, some analysts are projecting even higher prices, with $7.00 being a favorite target. The obvious question is: Why are higher prices needed?” he said. The role of the corn market is twofold. First, corn has to be priced so that current supplies last until the next harvest. Second, corn prices have to motivate sufficient production in 2011 to meet needs during the 2011-12 marketing year, he said. The second objective is met primarily by directing acreage decisions in 2011. Corn prices continue to adjust as the market’s assessment of the “righ
