Sky's the limit as corn prices surge to new 10-year high

Renewable Fuel News, January, 2007

Corn prices on the Chicago Board of Trade rocketed for a fourth day on Friday to a new 10-year high after the U.S. forecast record demand for ethanol would lead to the smallest global inventories in 29 years.

Chicago corn futures for March delivery rose 5% - the maximum daily move permitted by the exchange. The contract closed Friday at $4.165 a bushel, its highest since July 1996.

Further still, the ethanol boom is very likely to drive corn prices even higher in the next two to three years, largely because the industry's growth calls for an additional 500 million to one billion bushels of corn every year, according to a recent JPMorgan report.

JPMorgan's study predicted that average corn prices would come out to about $4.03 per bushel in 2007 - up 61% from...

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