LONDON – Commodity analyst, DePutter Publishing, has been predicting a sharp rise in the price of corn for several years. But nobody expected the price to climb in the middle of a bumper North American harvest.

“There’s lots of corn right now,” says Wayne MacLean, assistant analyst with the company. “But there isn’t going to be enough corn in the coming years.”

This fall the character of the market changed, he said. Buyers became anxious to own corn and speculators saw an opportunity to take advantage of a commodity that looked under priced and hard pressed to fill the ethanol demand. At Chicago, on November 24, old crop with a March delivery closed at (Can)$3.76 per bushel while Trenton closed at $3.66 and Winchester $3.61.

In just four months, the price of corn rose from $90 and $100 per tonne to $144 per tonne. However, the market is ready for a correction downward, says MacLean. “The decline will be moderate and then the market will slide up again.

“The prices next summer should be higher than now,” he said.

MacLean expects a shortage in the world supply of corn because usage has increased. More people today are eating meat that requires grain, especially in Asian countries. He expects the whole industry to rebound and agriculture to move into a golden era. The hog lows now are higher than the lows of the 1990s, he said, suggesting we’re headed towards better prices.

However, the price of soybeans has not kept pace with corn. Old crop is still hovering at $7 per bushel. MacLean expects soybeans will do some catching up.

Bud Atkins, former Seaway ethanol co-operative president, has some cautionary words: “If all these guys hold on to their corn looking for a better price, then CASCO (Ontario’s largest purchaser of corn) will bring corn in from the U.S.”