GENEVA (Reuters) — Expanding U.S. ethanol exports may help support corn prices in the coming year in the face of a huge U.S. corn harvest, analyst David Hightower said on Wednesday.
“U.S. ethanol exports are taking place to Brazil, which is surprising because Brazil is said to be highly competitive in ethanol production,” Hightower, founding principal of U.S. commodity research analysts Hightower Report, told the Global Grain conference.
“Exports of ethanol by the U.S. to Brazil and other parts of the world are becoming significant,” he added.
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Other factors likely to support corn prices in 2015 from current low levels include expectations of rising demand for animal feed, he said.
“Low prices cure low prices,” he said. “Feed demand will probably get larger and will be a bigger driver to put a bottom on the market.”
He expected corn demand from the key importer China to remain strong in the coming year.
There were also expectations that some U.S. farmers could turn away from corn after this year’s huge U.S. harvest towards other crops, he said.
Chicago corn prices in 2015 could range between US$3.60 to $3.80 a bushel in a negative external environment including unfavourable dollar values, and between $4.20 to $5.20 a bushel in a more positive environment, he said.
