Price of corn reaches a record of $6 per bushel

Source : AP

"Corn is in demand to feed livestock and make biofuel.

NEW YORK (AP) — Corn prices jumped to a record $6 a bushel Thursday, driven up by an expected supply shortfall that will only add to Americans’ growing grocery bill and further squeeze struggling ethanol producers.

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol. Prices are poised to go even higher after the U.S. government this week predicted that American farmers — the world’s biggest corn producers — will plant sharply less of the crop in 2008 compared with last year.

“It’s a demand-driven market and we may not be planting enough acres to supply demand, so that adds to the bullishness of corn,” said Elaine Kub, a grains analyst with DTN in Omaha, Neb.

Corn for the most actively traded May contract rose 4.25 cents to settle at $6 a bushel on the Chicago Board of Trade, after earlier rising to $6.025 a bushel — a new all-time high."

Many economic forecasts call for food grains to be pushed higher over the next 10 years, feeding a frenzy of rampant speculation in some of the basic commodities. Demand and Supply ... wonder how many times it has been used to justify a run up in prices to support the speculations of many and on the way down.. it's always "too big to fail". It will be interesting to see how this one turns out and who gets whacked in the end. For now .. it looks like "corn" will be going off the table as food and be flying away like "hot cakes".