There are many reasons and variables why commodities in general are making an expected comeback, while agricultural commodity grains continue to struggle.
Corn is one of those, as it dropped for the second day in a row, while its commodity counterparts outside of grains made significant increases, including oil, gold and silver.
Corn futures, and other grain futures will continue to battle to retain price thresholds as the economic slowdown cuts back on governments spending money in the U.S., which in general has higher grain prices.
The price of corn futures has already fallen over 50 percent since early summer, and there's nothing in play that will keep that from continuing on.
While the Argentine drought has cut into wheat, corn and soy production, it doesn't look like it'll cause any shortages, as global production has been up this year.
There has been nothing wrong with the grain this year, as the yield for corn has been good, and production solid. That's not the problem, as with oil. There's just so much people are willing to spend this year across the world, and demand, more than anything else is what's driving corn futures, as well as most other commodity markets.
Now that government spending have been irresponsibly brought into the mix, farmers, companies and investors are looking to them for solace, rather than allowing the market to clean itself out and poorly run businesses to fail.
So with corn storage, production and yield being fine, the deciding factor will be the economies of the individual countries and the willingness to spend on grains, including corn.
Until the pocketbooks are opened up again, corn futures, along with all grain futures, will continue to be under downward pressure.
Accordingly commodity grains and the corn belt that produces them will struggle until the economic conditions improve. From what it looks like, it'll be some time before that battle will be over.
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