Corn Futures Ready To Pop? We’re All Ears

Image by: WayTru
By Steven Morrison II

Corn. It is not just for breakfast, lunch and dinner anymore. In fact, corn is everywhere these days, including being used in manufacturing, in packaging and as a fuel for our automobiles.

Try eating something that doesn’t have any corn or a corn-based derivative in it.

Don’t believe me? Watch the eye-opening documentary King Corn and see what I mean. The film expertly and entertainingly gives you the skinny on our corn-based lives, including discussing our increasing reliance on (highly controversial) high-fructose corn syrup (HFCS) infused products.

Corn has become such an integral part of our lives that wild fluctuations in the price of it can mean death for some areas of the world, both physically and economically.

We have actually come to terms with paying close attention to the price of corn.

Here’s a little fun fact: In Germany, they consider corn to be a “pig food,” meaning they don’t think it is worthy of human consumption. Well, Col. Klink, this little piggy just went to market … and got himself six ears, a 12-pack of Coca-Cola and a gallon of gravy.

Aw, Shucks

Never included corn in your portfolio? Now may be the time to add a little yellow as signs are pointing to a dwindling supply and an ever-increasing demand for the stuff.

For one thing, South American growers are hurting for rain in such a bad way that they could be suffering huge losses if they don’t get a little love from the weather system.

Inventories are also becoming strained. Last month, the amount of corn on hand reached a nine-year low, so says the U.S. Department of Agriculture. In 2012, 13% less corn was produced by American farmers than in the previous year.

Recent record-shattering gains in corn futures show that many investors are thinking the same thing, that corn will be a hot commodity over the next several months, which will no doubt drive up the price.

But keep an eye on things as there is much unpredictability with any crop – what the weather unpredictable? nah – and volatility in the marketplace.