Informa sees big crop hitting corn price

By Christine Stebbins

CHICAGO (Reuters) - The price of corn futures on the Chicago Board of Trade BOT.N could fall below $3 per bushel by year's end, if U.S. farmers plant a significantly larger crop and the summer weather cooperates, the head of Informa Economics said on Wednesday.

"A trend-based yield with a rather significant expansion in corn acres will generate a crop of an ample size to bring corn back below $3 per bushel by the end of '07," Bruce Scherr, chief executive of analytical firm Informa Economics, told the Reuters Global Biofuel Summit in Chicago.

"That requires that this next new crop be realized at an adequate level to boost the carryout and meet evolving demands," Scherr added.

CBOT corn prices hit a fresh 10-year high of $4.20-1/2 per bushel by midday Wednesday as projected strong demand for corn keeps prices strong.

Corn use by ethanol manufacturers is forecast to expand by more than 1.0 billion bushels in the coming year, up from 2.15 billion this season, as corn-based ethanol production is seen soaring.

Last year, U.S. farmers harvested 10.535 billion bushels of corn after seeding 78.3 million acres to corn.

The general consensus among traders and analysts is for 2007 corn acres to expand 7 million to 9 million over 2006.