Chicago Corn prices 2011-2012 Average $6.60 per bushel

Corn prices in Chicago may average $6.60 a bushel in the 2011-2012 marketing year, down from a previous estimate of $7.25, according to Morgan Stanley. Corn may be “one of the weaker commodities in 2012,” partly because of record supplies from South America in the first quarter, Hackett Financial Advisors said Dec. 2.

Corn prices in Chicago slipped 1.9 percent last week after the USDA on Dec. 9 raised China’s corn output estimate for this year by about 7 million tons from a previous outlook to a record 192 million tons, in line with China’s official estimate.

It’s “a joke” that the USDA adopted this figure given China’s limited yield and land, Feng said. Yigu projected 170 million tons, compared with 166 million tons by Shanghai JC and 189.2 million tons by Geneva-based SGS SA.

Corn prices in China will be “range-bound” between 2,200 yuan and 2,400 yuan a ton in the next few months, Yigu’s Feng said. China said Dec. 19 it would buy domestic corn to support farming. The policy effectively sets a price floor of about 2,200 yuan in Dalian, the price-setting center in China, said Feng. Shipping to Shenzhen from Dalian is about 40-60 yuan a ton, according to Shanghai JC.

The upper range of next year’s domestic price depends on feed demand from the livestock industry and corn processors, said Feng. The government may allow a gain of 100 yuan to 200 yuan for increased production costs, he said.

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