Article: When trying to predict whether corn will go up or down in price, it is important to know about the agriculture business and what factors lead to a profitable or a lousy harvest. Read up on the kinds of corn that are being sewn. In recent years, farmers have started to use genetically modified strains of corn that are resistant to disease, require less water and sunlight, and are even resistant to fire and flood. These hardier strains of corn are more likely to yield abundant crops, which can affect the price of corn on the market. If you discover that a new strain of corn will be used in the coming year, you may choose to buy more, banking on the promise of a better corn yield. Consider the effect that new fertilizers, irrigation techniques, or farm equipment might have on production. Will these factors lead to a greater crop yield? Will farmers have to pass the cost of these upgrades off to the consumer? These are questions to consider and to read up on regularly. Think about weather too. All crops need water. Drought and floods can equally ruin a corn crop yield. The majority of the corn crop in the world is grown in the United States and China. Pay attention to weather in both areas and agricultural reports about rainfall to determine possible effects on corn commodities. Corn is primarily produced for livestock consumption. Most foods that cats and dogs eat contain "grains" which in many cases include cornmeal. What remains is packaged for human consumption or forms the basis for many industrial goods that use starch, high fructose corn syrup, or ethanol. Follow companies that purchase a lot of corn for their products. Anticipate conditions that might lead to rising prices like increased consumer demand, the opening of new factories, and the expansion to new markets. Ethanol production, in particular, depends heavily on corn. Ethanol or ethyl alcohol is used for alcoholic beverages, medical supplies, and fuel. Ethanol is the single largest fuel additive in the world and is produced all over the world. The United States alone produced 13.8 billion gallons of ethanol in 2011 and companies like ADM, Poet, Valero Energy Corporation, Green Plains Renewable Energy, and Flint Hills Resources LP produced 40% of the total amount in the US. Pay attention to the major companies in your country. Spikes in prices often follow decisions to open new ethanol plants, which will require more corn to process. This may sound funny, but government regulations can affect the ways that corn commodities are regulated and priced. For example, if the government places an increased tax on the shipment of corn across state lines, you'll probably be paying a higher premium for your corn futures. Lowly farmers and big agricultural conglomerates won't want to foot the bill, so they'll raise the prices. Similarly, if you read that the government will pass legislation making it easier to make, move, and sell corn, you can anticipate cheaper prices. Follow www.ethanolproducer.com for insider knowledge into the workings of corn politics and the ethanol industry. These come from the government. Watch television. Read newspapers. See what "leading experts" say about government reports on commodities like corn. Remember too that everyone else in the business is watching with an eager eye as well. Use this information to best assess when you should buy and sell, but don't get too hotheaded. Many media conglomerates drool over dramatic conjecture. If they manage to create a stir, they'll see better ratings. This could lead them to exaggerate certain things. If the news analyst tells you to sell for whatever reason, double and triple check their stances with other information outlets. See what others are saying about the same topic. It is possible that you could actually gain from this process. If others, less even-tempered than yourself, sell off at cheaper prices, you might even pick up more futures in the long run for less money. Certain commodities like lumber, natural gas and corn are in higher demand during hurricane season. Track the season and the predictions, and buy corn commodities in plenty of time to anticipate hurricane season demand. In the case of corn, other weather conditions (including drought and hail as well as widespread good weather) can drive supply up or down and affect future prices.
What is a summary of what this article is about?
Understand what factors affect corn production. Anticipate the needs of businesses that use corn. Keep an eye on corn politics. Pay attention to projection analyses. Remember the "hurricane factor".