Is corn going to go lower?
Answers
951 points
Grudun answered 4 months ago …
It is unlikely to go down. There is built in demand with the federal subsidy and requirement for ethanol, corn being used as the primary food for meat animals(Cattle, chicken and pigs), and corn in so many products(as a filler, corn syrup, and actual corn meal). Also with the flooding this summer along the Mississippi the amount of corn produced should be comparable to last year(there was more acerage planted this year, but a lower yield in the flooded areas). So I am pretty sure there the price will not drop unless there is unexpectedly high yield from the undamaged fields.
Read more from Grudun flag as abuse great answer
2633 points
MNSL answered 4 months ago …
Pl read following link:
http://www.bloomberg.com/apps/news?pid=20602013&sid=aRnQiARDLcOQ&r efer=commodity_futures
Corn fell, capping the biggest weekly drop in 12 years, after Argentina revoked escalating taxes on some grain exports, ending a dispute with farmers that disrupted shipments. Soybeans and wheat also dropped.
Other Factors to watch:
According to USDA data the marketing year that started June 1, Australia is going to produce grain 24.5 million tons this year after collecting 13 million tons a year earlier and 10.8 million in 2006. Drought destroyed Australian crops for the past two years
Similarly other major gain producers also going to increase their production in the coming year. Even countries like India, Pakistan and other Asian countries going to produce more grain including corn. Now some countries have becomes exporters to other countries.
Sudden bearish outlook from leading investment banks and some futures brokers through out the world.
Corn, wheat and soya bean futures are plummeting in the futures market now. Therefore, as an investor you should know when to buy and sell to minimize your losses. In one country when Oil was at $147, they were trying to educate public to invest in oil futures. To my surprise, oil analyst is bearish on oil futures in that particular country now.
Worldwide effort to control inflation including in the USA.
Concern about falling demand for some grain based products.
More corn inventories than before
According to data from the Commodity Futures Trading Commission Hedge, funds and other large speculators cut net-long positions in corn futures by 3.2 percent, in the week ended July 1. Large speculators held record net-long positions of 379,263 contracts at the end of February.
Index funds that invest in baskets of commodities reduced net-long positions by 7.8 percent from a record of 452,568 contracts reached in the week through April 29.
2633 points
MNSL answered 4 months ago …
I like to add some more:
The December contract moved below its 100-day moving average on 07/18, which traders say may signal further liquidation selling by commission houses and funds.
It is also reported that export premiums are said to be falling for Argentine corn, further reducing demand for US corn.
Pl see following link:
http://econ.sdstate.edu/Extension/corn.htm
No matter how one looks at it, the downturn in corn the past two weeks has been one of the more vigorous downturns in a long time
This market can best be described by the phrase that “what the market gives, the market can take away” and take away it has done.
Most commodities have seen large price downturns in the last week or two. Concerns about slowing demand for commodities due to potentially inflationary signals in the economy have investors bailing out of positions to take profits and either pocket the cash or invest elsewhere.
Demand projections for the current marketing year show a decline in total usage of 215 million bushels over the last two months. The projections for the 2008 marketing year reflects huge declines in corn fed to livestock and in exports but a large growth in corn used for ethanol
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