Mean Green

The USDA recently came out with their estimates for corn ending stocks at .935 billion bushels which is 8% less than last year and an 11 year low. In fact the last time corn stockpiles were this low corn futures prices hit an all time high of over $5.00 per bushel. There is no guarantee that this same supply scenario will lead to all time high corn future prices again but massive amounts of new corn acreage will be necessary to keep up with the current demand and put a lid on rising corn futures prices.

Another consideration is the weakening US Dollar which makes American grains cheap to foreign buyers. There is more than a little talk by China and other Asian countries about reducing their amount of US Dollar holdings in favor of stronger currencies such as the Euro and the British Pound. This increased foreign buying power should lead to increased foreign demand and can also have an extremely bullish effect on corn futures prices over the near term.

Many analysts believe that crude oil futures prices must remain above $50 per barrel in order for ethanol production to remain profitable. Ethanol demand and usage is growing dramatically since the US government mandated its use instead of MTBE which was found to be poisonous to groundwater supplies and potentially harmful to humans. This mandate to use ethanol as a gasoline additive may also cut into the already tight corn supplies an help push corn futures prices higher.

There are two basic ways to speculate in the expectation of higher corn futures prices. Investors can purchase or go long corn futures contracts or purchase call options on corn futures. Many new investors choose purchasing call options on corn futures because of the finite risk aspect of purchasing options. Visit http://www.tkfutures.com/basics.htm to learn more about the mechanics of futures and options investments.

Before investing in corn futures or corn options investors must understand one basic truth. High profit potential investments such as corn futures and corn options carry with them a correspondingly high risk of loss potential. Investors in corn futures and options should only use risk capital because there is risk of loss in futures and options trading.

Incoming search terms for the article:

what does bull corn mean,what does bull corn mean?,what does ending stocks mean,corn biofuels science fair,corn futures all time high,What does corn futures mean,what does bullcorn means?,what does corn ending stock mean,what does corn ending stocks mean?,bull corned & what it means,what does ending stocks mean for corn?,what does ending stocks mean in corn,what does futures mean in corn,What does Tight ending stocks for corn mean?,what do high futures prices mean,scientific words that mean corn,corn options,corn options risks,ethanol and effect on corn futures,future ethanol demand australia,future market ethanol australia,future market for bio - ethanol,future market on bioethanol,green future corn ethanol website,potential investors on corn futures in Australia,science words for corn,scientific words for corn,what is corn futures means

Random Posts

• What is the Availability of Solar Energy in the United States?
• Bio-Ethanol – The Good, the Bad, and the Ugly
• Bioplastics – The Technology Gains Momentum, But Hurdles Remain
• Algae BioFuel a Literal Way to Go Green
• 10 Eco-Friendly Green Toy Companies
• Rescue the American Dream From the Tyranny of Foreign Oil
• Bio Fuel and Corn Cravings of the US – A Mix View of My Own
• Biofuels As an Alternate Energy Source – Its Impact on the Economy
• Renewable Energy Sources – A Brief Summary
• Auto insurance quotes rising because of fraud

This entry was posted on Friday, August 20th, 2010 at 10:57 am and is filed under Biofuels Ethanol. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.