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Starlink Weighs On Market

posted on November 10, 2000


At week's end financial and commodity markets alike were nervous about the uncertainty of the U.S. presidential election. That angst was sharply contrasted by the rest of the nation that simply went to work, perhaps warmed by the comfort the country would not be governed by any partisan political mandate. It's likely the "do nothing" 106th Congress will look frenetic compared to the incoming 107th.

Government numbers released this week indicate inflation at the wholesale level remains under control. Tepid projections for holiday retail sales fuel notions the economy is cooling. It seems more likely the Fed will not raise interest rates.

In Rural America autumn harvests are nearly complete. Longer-term price prospects look encouraging. Short-term, markets are being curbed by supply-demand fundamentals, exacerbated by a technology-driven flap.

 

Starlink Weighs On Market

In recent weeks the corn market has been jolted by the discovery of minuscule amounts of the so-called starlink gene in taco shells. Starlink corn has the potential to cause an allergic reaction in some humans. For that reason it was approved for use only as animal feed.

While starlink corn was planted on less than 1-half a percent of total u.s. corn acres the fear in the marketplace is the potential of starlink commingled with other corn could effectively turn off the export spigot. Japan is a particular concern.

Those fears rolled back last week's price gains even in the wake of the release of generally bullish government numbers.

Lower than anticipated yields have reduced the USDA's estimate for this year's corn crop. The projection now is the crop will total 10.05 billion bushels. That's one percent below last month's estimate, although 7 percent greater than last year's crop. The government also reduced its estimate for the soybean crop by 2 percent from last month. But raised it's projection for the cotton harvest slightly.

The new numbers did little to support feedgrain, oilseed or fiber markets. And the starlink matter continues to weigh, perhaps excessively, on export prospects.

For its part Aventis Crop Science, creators of starlink, is petitioning the environmental protection agency to allow any starlink corn already in the system to be approved for human consumption. Company scientists have new data they believe proves the current level of contamination is not enough to cause an allergic reaction.

The E-P-A will hold a hearing at the end of the month to determine if a permit will be issued allowing Starlink corn already commingled with its conventional counterpart to be consumed by the public. In the meantime, Aventis is tabbing up its cost of recovering Starlink corn that has entered the grain supply. The company says the expense will be well below one billion dollars.

 


Tags: agriculture biotechnology controversy corn crops genetic engineering news