US could become net corn importer

The United States could shift from the world's largest exporter of corn to a net importer as its burgeoning ethanol industry continues to expand, but in the meantime sales abroad are poised to rise as farmers boost acreage to cash in on decade-high prices.

The demand for corn-based ethanol could be so strong that the United States might one day become a net importer of corn, said Jose Rasco, investment strategist at Merrill Lynch. Calls by President George W. Bush to use 35 billion gallons of renewable fuels by 2017 have many pondering how the country will achieve such a goal. Even Bush acknowledged last week that his plan for a five-fold increase in ethanol use will be constrained by the amount of corn that American farmers can grow.

US exports may decline in the coming years, but other countries are likely to export more corn if prices remain high. Higher corn prices are likely to spur corn plantings in Brazil and make it a regular exporter. Brazil exported about four million tonnes of corn last year. The United States exported an estimated 55 million tonnes. Argentina, currently the second largest corn exporter, is also expected to sell more corn abroad. Argentina exported about 12 million tonnes of corn last year, USDA said.

As corn price rises, so could food bills

energybulletin.net -> kansas.com :

President Bush's State of the Union call for a sevenfold increase in ethanol production within a decade could have the unintended consequence of sparking corn shortages and driving up prices for a wide array of food products. Bush said he wanted 35 billion gallons of ethanol in the nation's fuel supply by 2017, and he proposed an ethanol subsidy of as much as $17.8 billion over a decade, as well as grants and loan guarantees. To meet Bush's goal, a substantial amount of corn that's now used to feed animals or make food products may be diverted to producing alternative fuels, and that worries cattle ranchers, hog farmers and poultry producers, who depend on feed corn to raise their animals.

As many as 79 ethanol plants are under construction in the United States and at least 111 are already operating. As more come on line, the demand for corn will surge. That's sparking a bidding war for corn that will mean higher food prices for consumers. As corn prices rise - they've climbed from about $2 a bushel in August to more than $4 a bushel today - the cost of beef, chicken and pork, along with related products such as eggs and milk, also rises.

In 2000, about 6% of the nation's corn harvest went to produce about 1.6 billion gallons of ethanol. Last year, 20% of the corn harvest was used to make 5 billion gallons of ethanol. When the ethanol plants under construction come on line by 2009, they'll have the capacity to produce 11.4 billion gallons, more than double last year's production. They'll need a lot more corn than is being planted now.

- Let's see. If 5 billion gallons of ethanol equals 20% of the corn harvest, then 35 billion gallons equals 140% of the corn harvest. Hmm. I'd suppose those Kellogg's Cornflakes are going to cost a lot more.

(2007-02-01 13:08:24 SGT) [Energy] Permalink

Uranium prices hit $75

theglobeandmail.com :

Uranium prices have resumed their upward climb after an apparent five-week lull. The spot price for the fissile metal, the key component of atomic fuel, rose to $75 (U.S.) a pound in the week ended Monday, up $3, Ux Consulting Co. LLC of Roswell, Ga., said in a weekly report.

Uranium has been one of the hottest performers among commodities in the past several years. Its spot price has more than tripled since 2004, and a number of analysts expect it to approach the $100-a-pound mark this year. The metal does not trade on any public market, and Ux Consulting tracks prices by keeping tabs on private deals.

A key recent impetus for the upward climb was the flooding late last October of a massive planned Cameco Inc. mine at Cigar Lake, Sask., that, assuming it can be saved and brought on stream down the road, could churn out as much as 17% of annual world production.

- Uranium goes up to $75 while crude oil hovers around $57. That's interesting.

(2007-02-01 10:02:39 SGT) [Energy] Permalink

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