“The ongoing mild winter has already influenced many grain farmers in the Midwest to apply anhydrous. That tells me they are planning on planting corn. And, talking with growers in the area, there is nothing to indicate they won’t plant more corn, based on winter weather this year,” he adds.

“All the indications we have are that weather will be an incentive to plant more corn and certainly not a detriment that would limit corn acreage in the Midwest,” Brock says.

“The USDA is forecasting 94-95 million acres of corn in the U.S. If the weather pattern holds and growers hit that number and the yield line goes back up to around 160 bushels per acre, we could push our current level of carryover from about 850 million bushels to more than a billion bushels.

“If we top the USDA estimate, say 96 million acres and weather and technological advances come together, and growers get up in the 162 bushel per acre range, we could have a 2 billion bushel carryover,” Brock says.

Lower corn yields the past two years (152 bushels per acre in 2010 and 147 bushels per acre in 2011) have helped keep high corn prices in play.

High prices don’t mean $7 per bushel — that is as artificially high as $2 a pound cotton, but in the $5-$6 range, Brock says.

While $7 a bushel corn was good for corn farmers in the short-term, it was bad in both the short- and long-term for corn buyers. And, as is the case any time commodity prices go high, users of the commodity find alternatives.

“A quick look at livestock numbers makes it easy to understand why we used more corn for ethanol last year than we used to feed livestock. Livestock producers either reduced the size of their operation or they found a more economically suitable feeding system that included less corn.

“High prices can drive demand down quickly, but low prices don’t necessarily drive demand up quickly. In fact, the opposite is almost always true.

“When cotton went to two dollars a pound, textile plants all over the world shifted to polyester for half the cost. Re-tooling mills for lower priced cotton will take a long time, especially if there are no strong economic indicators that cotton prices will remain at less than a dollar a pound.”

The same scenario is true for corn, Brock says. All the supply and demand factors add up to a reduction in demand and potentially a huge carryover that will further push supply up and most likely keep prices low for a while, he says.