Coming to this part of the time, the drought in the United States of America and the typhoon in the China had almost taken the prices up very high as the crop was approaching record low sales. Nothing seemed like following good ways, adding to the above factors even the coming up polls in the USA are bringing major commodities down, not leaving corn as an exception. But the patient wait of the investors now seems to bring something fruitful. China is on the way to its third highest corn harvest which will definitely ease the crop status.

The rise in the harvest is of 3.6 percent taking it to 199.74 million metric tons which undoubtedly is going to ease the market. Currently, the price which is being paid by the consumers is the highest so far resulted due to the drought in the US and European zones. This phenomenon also contributed to the 7.7 percent hike in the United Nations – tracked global food prices since June. But now when the harvesting in China is showing great signs, things seem to change soon. The experts have expected the corn prices to drop by 12 percent by March.

Corn is one of the eight commodities of the agro-sector. They form a group which is highly traded in the global exchanges. The Standard & Poor’s GSCI Agriculture Index of eight commodities showed an advancement of 10 percent this year even in case of such a worse drought in the USA. This advancement was the highest since 1956. When the prices were rising, the hedging with the crop also did not benefit well, thus suggesting that now when things have changed, not only the speculators but even the arbitrageurs and hedgers have also good opportunities to make money.

Like other agricultural products, corn is also one of the seasonal crops and the season of corn seems starting in March in the South American producers like Argentina and Brazil. But there are high expectations that the corn prices may fall by 12 percent by March which looks beneficial to the short position traders of the corn, generally a minority. In 2012, China sowed corn in 4.7 percent more land than in 2011 and earlier years, and sowed well. This is supported by the production status. Finally, the uptrend of the corn prices seems to change.

To conclude the current status, the production in the China is massive indication of the prices coming down and on the other hand, the presidential elections in USA will have the influence in the overall markets of the globe-which is yet to be decided!

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.