On March 30, corn and the rest of the grains complex suffered their worst single-day drop in weeks following a government report forecasting the largest prospective corn crop since 1944 projected for 2007. The news sent corn, oats, soybeans and wheat futures down sharply last Friday, closing at their daily maximum limits.

As the boom in ethanol continues in the late 2000s, farmers are enjoying their fattest revenues since the 1970s. Corn crops have shrunk until recently in the United States as ethanol plants pop-up across the nation combined with rising demand from emerging markets, including China, a net importer of corn, wheat and soybeans. The USDA or United States Department of Agriculture, in its recent corn crop forecast for this year, fails to take into account erratic weather patterns, droughts and other factors that might affect crop yields. Over the last 12 months, corn prices have surged 58%.

Farmers might indeed sow more corn this year, but the drive to boost consumption of renewable fuels is gaining traction worldwide, especially following President Bush's State of the Union initiative in January to dramatically increase ethanol production. And as oil prices rebound sharply from their mid-January lows and eventually surpass their August 2006 highs of $77 a barrel, the momentum to supplement high-priced oil will only encourage more corn-based ethanol production, further denting supplies.

As for other grains, the aggressive corn planting forecast might be a boon for other crops, namely because corn-hungry farmers will grow more maize at the expense of oats, barley, soybeans or wheat.

The bull market in the grains complex, which began last summer, has a long way to go. I'd use any intermittent price weakness as an opportunity to buy more corn, wheat and soybeans. In my Commodity Trend Alert, now in its sixth year, we're long the grains and continue to buy into any short-term weakness.