Corn future prices with a tendency to decline
The Chicago Board of Trade closed last Friday, February 26, 2021 at $550/bushel of corn
The Chicago Board of Trade closed last Friday, February 26, 2021 at $550/bushel of corn. However, at the close of the markets, corn future prices were trending downward, reaching at $ 470/bushel by December 2021.
During the past year, markets for the main agricultural raw material have been highly volatile and the prices of the main cereals have increased up to 70% due to various factors: on the one hand, crops have been affected by various meteorological phenomena that have damaged crops causing shortages in global supplies. On the other hand, China, which has a strong demand for grain, has promoted massive purchases of these inputs.
In addition, it should be noted that this fluctuation is also caused by investments in these products known as commodities. A commodity is a basic good of a commercial use. It is produced in large quantities and has a value at the productive level. Therefore, cereals are classified as commodities and investors see this type of product as an opportunity to make their savings profitable by buying future crops. This also leads to a rise in prices.
Corn a basic product for human consumption and animal production
In this case, corn is a basic cereal for intensive production, becoming one of the main food for animal production. It should be noted that animal feed accounts for about 70% of the total costs of animal production, so the price of raw materials has a direct impact on animal production.
On the other hand, corn is also a basic cereal for human consumption, being the basis of many of the foods consumed mainly in Latin America.