In something of a surprise today, corn prices gave back nearly all the gains they made in August, closing at the Chicago Board of Trade at $8.13/bushel. That’s a 12% drop in the last week and a 7% drop from the four-week average.
The blame (or credit, depending on one’s point of view) goes to lower-than-expected exports. In short, the high price for U.S. corn has stifled demand, at least from countries that import corn from the U.S.
Today’s news doesn’t really change the calculus for the next few months. Corn production will be significantly lower this year and demand, particularly from ethanol producers, is expected to continue at its current level.
It is possible — even likely — that ethanol makers have already bid up the price of corn in order to guarantee their supply. Government-mandated production levels guarantee ethanol producers a profit, no matter what price they pay for corn. When Congress returns from its August recess, expect some debate over the ethanol mandate, but don’t expect the mandate to be suspended without a fearsome struggle.
Paul Ausick
In 20 Years, I Haven’t Seen A Cash Back Card This Good (sponsor)
After two decades of reviewing financial products I haven’t seen anything like this. Credit card companies are at war, handing out free rewards and benefits to win the best customers.
A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges.
Our top pick today pays up to 5% cash back, a $200 bonus on top, and $0 annual fee. Click here to apply before they stop offering rewards this generous.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
