Iowa Public Television


Export Demand Pushes Corn Prices Higher

posted on March 7, 2003

Hello, I'm Mark Pearson.

As the U.S. prepares for a war in the Middle East, the nation's financial community has grown increasingly nervous, as has the driving force of the American economy – consumers.

Demand for big ticket, so-called durable goods has fallen. Unemployment has edged higher as anxious employers begin to operate more cautiously, and stock market indices have retreated on light trading as investors head for the sidelines.

To be sure, geopolitics has an effect on trade sensitive Rural America. Typically, commodity prices can be extremely sensitive to world events. This week, global uncertainty seems to be generating demand for one farm commodity.


Export Demand Pushes Corn Prices Higher

After gliding downward for several weeks, corn futures prices this have begun to trade sharply higher. Much of the rise is attributed to a sharp recovery in export sales.

Reported at 1.4 million metric tons, weekly corn export sales were well above trade expectations. While total sales for the year are still viewed as sluggish, many in the trade believe surging foreign demand, along with the risk that is inherent in a crop that has yet to be planted, will continue to push futures prices higher. That risk is not expected to soon ebb. While the main part of the nation's Corn Belt has historically weathered droughts, a meager Rocky mountain snow pack and sparse subsoil moisture on the plains points to a drought this year in the western Corn Belt. Last year's disaster has already taken a toll on nearby grain supplies for western feedlots. Another year of drought could be devastating to the region's farmers and cattle feeders.

Tags: agriculture corn crops markets news