A really interesting piece on the planting intentions of US farmers.
Currently, the rush to ethanol as an “environmentally friendly” fuel augmenter has meant that its primary ingredient, corn, is soaring to new heights on the markets. Demand is high, ethanol plants are popping up everywhere and the industry is booming. As a result, farmers are looking at replacing other crops, for example cotton and rice, with corn and cashing in on this growth industry.
The question is then offered – will cotton planting intentions be at less than the market expects, in which case cotton futures will go through the roof? Or will farmers be more reluctant to change over to corn in such a vast and wholesale manner, thereby sending cotton futures down?
We’ll know within a week. Either way, I personally can’t see corn going anywhere but up. Get used to corn fed chicken and beef becoming incredibly expensive on your local supermarket shelves, kids.