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ETHANOL PLANTS IN EASTERN CORN BELT PAYING $1 OVER FUTURES
Jun. 7, 2011
Source: The Brock Report
Ethanol plants, particularly in the eastern Corn Belt, are on the front lines of a battle to secure remaining 2010-crop corn.
Cash bids as high as 60 cents to a dollar over July futures were reported this week.
Farmers can't sell what they no longer own and those still holding old-crop corn are very reluctant sellers with the crop in that part of the country off to an extremely slow start.
Corn buyers are not being this aggressive in the cash market because they see a rosy profit outlook.
In fact, paying 50 plus cents over the board virtually guarantees ethanol producers will lose money on this summer's production.
But they must have corn to stay in business and therefore have little choice but to go head-to-head with livestock/poultry feeders and other ethanol plants for remaining supplies.
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