World Grain - December 2010 - 33

FEATURE: ARROW POINTED UPWARD FOR GRAIN PRICES

corn yield just wasn't there," said Basse.
"All of us were fooled, because in U.S.
corn we follow these things called 'good
to excellent ratings,' " he said. "The industry loves them. I hate them because
they don't correlate very well with yield."
"As my farmer friends will tell you,
this is probably the best looking, poorest yielding crop they had ever got," he
said. "It was just that way. Temperatures
across the Midwest were the highest or
second highest going back to the 1960s
... a very warm and a very wet year."
Technical advances could not prevent
the problem.
"Monsanto has a gene for what, let's
see? I think they have weeds. I think
they have bugs. They are coming up
with drought, but they don't have a gene
for too hot a temperature or too much
rain, and those were the things that got
us this year," he said. "So we have a
smaller U.S. corn crop.
"This was still the third-largest U.S.
corn crop on record. It wasn't that bad
a crop. The world has so much pressure
on it to produce grain that we can't afford any shortfalls."
He expressed concern about the
weather
"We all know we have a rather strong
La Nina going in the equatorial Pacific," he said. "Our big worry is Argentina. The soil moisture profile of
Argentina is really quite dry. If I'm you
in the grain trade, I'm paying a lot of
attention to Argentina."

have to rise to $6.40 a bushel before
these guys would start losing."
He also pointed out that global vegetable oil demand is still soaring.
"Here in the E.U., you're going to
reach a new high in terms of industry use of palm, canola, coconut and
olive," he said. "The big driver is
Latin America, ladies and gentlemen.

ETHANOL PROFITABLE
Global petroleum consumption this
year is rising and will reach a new alltime high, but in the United States demand for gasoline is declining.
The U.S. Environmental Protection
Agency recently approved blends of up
to 15% ethanol in gasoline for cars produced since 2007
"So we have this outlook for ethanol
that's jumped dramatically. As of (Nov.
12), we had a breakeven of 82 cents a
gallon. If I am an ethanol producer in
the United States, I'm still making lots
of money. We estimate that corn would

They've mandated new soybean oil for
biodiesel, and it's taking a tremendous
amount of supply."
Chris Lyddon is World Grain's European editor. He
may be contacted at: chris.lyddon@ntlworld.com.
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World Grain - December 2010

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