That the U.S. top commodity were trading for the highest prices since July 2008 was not a demand deterrent for corn, which also is used for animal feed. The commodity also is used for ethanol as it burns more cleanly.
"Although the USDA left its U.S. corn inventory projections unchanged, we reiterate our expectation for further tightening in the 2010-2011 corn balance on continued strong feed and ethanol demand," according to a Friday report by analysts Damien Courvalin and Allison Nathan of Goldman Sachs.
At 2:15 p.m. on Friday, corn futures were up 1.01 percent, a 0.0775 cent increase to $7.74 per bushel.
"Further reported declines in corn stocks are not politically desirable as rising corn prices would undercut public support for subsidizing ethanol, which is the core element of the White House's biofuels policy," according to a Friday report by senior analyst Don Carson of Susquehanna Financial Group. "Grain prices need to rise in order to ration demand."
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