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July 11, 2008

Musunuru’s analyses published on popular finance Web site

Naveen Musunuru, assistant professor of agriculture at ULM, recently has had two analyses published on the popular finance Web site www.seekingalpha.com.

The first, an article titled “Increasing Ethanol Demand and the Likely Price Implications for Corn,” examines the importance of biofuels and increasing food prices throughout the world.

According to his findings, Musunuru states that U.S. farmers intend to plant 86 million acres of corn in 2008, a decrease in acreage by approximately eight percent. High input costs associated with corn and relative soybean prices are the encouragement to do this and favor soybeans instead.

As Musunuru mentioned, “The present estimated 86 million acres are still considered to be at high levels when compared to historical crop acreages. Also at the same time, the demand for corn is increasing at a faster rate than supply, creating an upward pressure on prices. With an estimated yield of 150 bushels/acre (the average yield for the last five years), and adding the previous crop carryover, 2008 corn crop will likely produce at least 13 billion bushels of corn.”

He determined that in terms of corn consumption, the largest domestic use concerns feed purposes. Also that “corn for ethanol use may increase anywhere between 15 to 20 percent, when compared to last year, resulting in an estimated use of 3.7 billion bushels of corn for this year.”

The complete article may be viewed at:
http://seekingalpha.com/article/74316-increasing-ethanol-demand-and-the-likely-price-implications-for-corn.

Since the analysis’ publication, Musunuru concluded that due to recent Midwest floodings and the concern about upcoming crop size, December 2008 corn futures price has increased more than a dollar since June.

Musunuru’s other published analysis concerns the U.S. economy.

“An Overview of Five Key Economic Indicators” is described by the author as “a quick summary of important economic indicators which have the ability to influence the markets. Every week or every month some kind of statistics pertaining to either general U.S. economy or producer/consumer interest hits the markets. Sometimes this information is overwhelming for people new to the financial markets, and it is especially important to know what to look for and how to interpret these indicators.”

Musunuru then mentions some basic and important economic indicators: the Institute for Supply Management Manufacturing Survey, the Employment Report, Gross Domestic Product, Personal Income and Outlays, and the S&P/Case – Shiller Home Price Index.

He ends the article by advising readers that this list is not exhaustive and that they should keep an eye on consumer price index, retail sales data, the shape of the yield curve, and federal open market committee statements to gain a complete picture about the state of the economy.

The complete article may be viewed at:
http://seekingalpha.com/article/76195-an-overview-of-five-key-economic-indicators

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