KEMPTVILLE — The corn market could be poised to turn on a dime as it did in 1996 when the price doubled. Analysts across the U.S. are saying there just won’t be enough to go around and corn on commodity markets could outperform copper and gold by 2008.

But Bud Atkins, past president of Seaway Valley Farmers Energy Co-operative, says that optimism is "the talk of speculators." The big guys (corn buyers) aren’t buying corn in Ontario. He sold some of his new crop for $127 per tonne, better than last year, but less than half of what it was worth when corn prices peaked in 1996.

Speculators are banking on the burgeoning ethanol industry. The high price of crude and environmental concerns have raised the demand for ethanol in the U.S., with dozens of plants built over the past year in the corn belt and along the Atlantic seabord. According to the United States Department of Agriculture, about 23 per cent or 2.1 billion bushels of the U.S. corn crop this year are expected to be used for ethanol. That’s up from 700,000 bushels from 2001.

Market analysts in the U.S. are predicting that ethanol use in the U.S. could reach 7 billion gallons by 2010.

Atkins says the ethanol industry might be the shining light for Ontario producers. Suncor’s ethanol plant in Lambton County is now on stream and expected to use 20 million bushels of corn. If the ethanol plants at Cornwall, Alymer and Hensall can become operational soon, buyers will have to be competitive and offer better prices. An ethanol plant at Cornwall would use about a third of the corn crop grown in eastern Ontario.

Speculator’s in the U.S. are so bullish, they believe the ethanol plants will take so much corn out of the market, the U.S. will have to curb exports.

Some Ontario producers don’t see a lot of optimism. Lloyd Crowe, a director in the Ontario Corn Producers Marketing Board (OCPA), says nothing is getting better in the marketplace for corn. Last year’s crop was selling for $100 per tonne the third week of July, less than the cost of growing and harvesting it. And this was in the midst of all the hype of escalating prices. A farmer typically wants to sell corn for minimum $140 per tonne.

Crowe, who is growing 1,500 acres of corn this year, says the only way prices will go the way the speculators predict this year is for the U.S. corn crop to be destroyed.

In July, the United States Department of Agriculture estimated corn exports will be slightly higher than last year while the total amount of corn produced will be about 500 million bushels above last year’s harvest.