T & K Futures and Options Predicts Record Corn Futures Prices for 2008

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Record ethanol production, competition for acreage with soybeans, and wheat, the weak US Dollar and global demand might push corn futures prices to record highs in 2008.

Record ethanol production, competition for acreage with soybeans, and wheat, the weak US Dollar and global demand might push corn futures prices to record highs in 2008.

Recent USDA estimates for 2008/09 crop year would mean that the stocks to usage ratio would drop to 8.7% (the second lowest level in 35 years). The all time low was 5% and corn futures prices hit their all time high that same year. Weather problems or an increase in demand have the potential to create historic tightness in the stocks to usage ratio and push corn futures prices back to all time highs. Visit http://www.tkfutures.com/corn.htm to learn more.

Corn futures prices need to be high enough to convince farmers not to plant soybeans or wheat in Spring/2008. This battle for the limited available farm acres with soybeans futures prices near $12/bushel and wheat futures prices over $10/bushel makes that choice much harder for farmers. Visit http://www.tkfutures.com/education.htm to learn more.

The weak US Dollar and the increase in global currency availability have led to food inflation. This situation is usually fought by raising interest rates but the sub-prime mess in the financial markets has made that unlikely. Especially when one considers that the financial services industry accounts for more than 30% of the United States' GDP.

The author of this article is a 14 year veteran of the corn futures markets and the president of T & K Futures and Options Inc. Before considering corn futures or options as an investment vehicle, one must understand that there is significant risk of loss in corn futures and corn options trading. Use only risk capital for high risk investments like corn futures and options. Past performance is not indicative of future results.

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MICHAEL SMITH
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