Corn prices are going insane. For those Apocalypse Now fans out there, they're going all Kernel Kurtz on us. The July futures price on a bushel of Midwestern pride cracked $7 yesterday, and it's not looking back.

So why's corn going pop? Well, it's funny; when gasoline is on the rise, oil companies are called out for their profiteering ways. Somehow, when it comes to corn and other agricultural commodities, people are able to focus on the fundamentals of supply and demand. In this case, it's the weather.

Flooding in Nebraska, tornadoes in Iowa -- it's brutal out there in corn country. This wicked weather coincided with planting season, and it's getting too late to replant corn. One agronomist estimates that if corn were planted now, it would only yield 65% of a normal crop come harvest season. The Midwestern tempest has already led the USDA to cut its corn harvest estimate by over 3%.

All of this damage is catapulting corn prices and crushing corn consumers, and ethanol producers look particularly vulnerable. That's led a Citigroup (NYSE:C) analyst to downgrade Archer Daniels Midland (NYSE:ADM), VeraSun Energy (NYSE:VSE), and BioFuel Energy. Some of the target price revisions are brutal. For example, the analyst slashed his target on VeraSun from $12.50 to $3.

Pacific Ethanol (NASDAQ:PEIX) wasn't even mentioned by analysts, but the implications for this company are clear enough. Citi's man says that "many, if not all" smaller-scale producers will have to shut down at these prices. Pacific shares got stomped.

Because Archer has more arrows in its quiver, I think the firm will come out all right. But Best Stock for 2008? That's increasingly looking like a poor call on my part.

You know what else looks like a poor call? Another analyst downgraded non-ethanol refiner Corn Products International (NYSE:CPO), even though that company is serious about its annual hedges. If you look at Corn Products' quarterly margin trends, you'll see none of the deterioration that's dogging others in the space. Today's sell-off looks like a buying opportunity in this particular piece of the corn patch.