This article is about the commodity in general. For the specific futures contract, see Corn Futures. For grains prices in general, see the article on Grains Prices .
Corn is the most widely produced feed grain in the United States, accounting for more than 90 percent of total production. Around 80 million acres of land are planted with corn. The majority of the crop is used as livestock feed ; the remainder is processed into a multitude of food and industrial products including starch, sweeteners such as high fructose corn syrup, corn oil, and ethanol for use as a fuel. As corn prices rise, agricultural companies stand to benefit as their corn or corn seeds command a higher price in the market. Companies who buy corn or derivative products such as high fructose corn syrup can be hit with much larger costs when corn prices
Corn prices - which usually means the price of corn futures - are intimately tied to energy prices, because corn is used to make ethanol. an additive in gasoline. Corn prices peaked in June 2008 with the Iowa floods - at around $7.88 / bushel, then fell in late 2008 and early 2009 as commodity prices - and in particular oil prices - declined, a result of a slowing economy brought on by the 2008 Financial Crisis.
Demand for ethanol may be destroyed by the development of a cheaper biofuel. One alternative recieving both attention and research dollars is cellulosic ethanol, made from plant-based materials like wood and grass. The close to one billion dollars of Obama’s stimulus bills spent on advanced biofuels research will make these alternatives more viable, but will also likely increase demand for ethanol as a whole. Source: www.wikinvest.com