The corn market is open all year long, however as corn is a seasonal its high trading season is mostly during the summer.
The Corn Market
The corn market is open all year long, however as corn is a seasonal its high trading season is mostly during the summer. Corn is distributed and sold during the winter, which leaves the summer to speculate the growth value, estimated numbers and more.
The first and perhaps the most influential report about corn is published in March by the United States Department of Agriculture (USDA). It refers to the expected amount of acres planted by the farmers, which naturally will impact the corn market price.
What Influences the Price of Corn
A corn market outlook will reveal that the US is not only the main producer of corn, but also its main consumer.
Only a minor portion of the corn harvest goes to food uses such as corncob and corn oil. Ethanol fuel is becoming more and more commonly used, mostly in the US, and is concocted with a fair amount of corn in it, to say the least. 40% of corn consumption goes to Ethanol production.
The corn market price is mainly affected by supply and demand rates. As the human consumption of corn remains mostly even, industrial usage can change. Therefore, if the price of Crude Oil shifts, we are likely to see a changes in the price of corn as well.
Corn price tends to soar during the summer, specifically from June to August, when the weather changes and affects the crops. This can bring about a dramatic change from the expected amounts published in the month of March, that bring about major changes in its price.
The main corn producer is the US, with over 350 million tons of corn per year. Right after it are China, Brazil and Argentina. As much import and export is involved in corn consuming, different factors can lay in; political changes, trading agreements, taxes and more. The nature of relations between the producing countries to the ones consuming them are crucial to determine the price of corn.