The latest global supply/demand report from the U.S. Department of Agriculture increases the forecast for corn and soybean prices this year due in part to stronger demand for ethanol and biodiesel.

Average corn prices are now expected to range between $2.90 to $3.30 a bushel, up ten cents from last month’s forecast. USDA Chief Economist Keith Collins said, “We think about 50 percent of the corn crop has been marketed so far this year at an average price of about $2.70 a bushel. As we look for the other 50% to be marketed, we think that could probably average about $3.50 a bushel.”

According to market analyst Brian Hoops of Midwest Market Solutions, this is only the fourth time in history that corn prices have topped the $3.00 mark. “The record year was 1995-96, so we are in some pretty uncharted waters for corn as far as cash price,” Hoops commented during a Minneapolis Grain Exchange conference call with reporters after the report was released Monday morning.

The average price for soybeans was also increased by a dime in the December report, to between $5.70 and $6.50 a bushel.

Listen to report from USDA Radio: USDA Report (1 min MP3)