From the macro to the micro… corn also displays a seasonal pattern. But, unlike the multi-year economic seasonal patterns Rodney described above, this crop’s pattern is contained within a calendar year. It’s also greatly influenced by the weather.
Look at how Corn Futures have traded over the last couple years…
At the beginning of June, corn was trading at $5.32 a bushel. Now, it’s trading above $7.73/bushel. That’s a 45% increase in less than two months.
The reason? Bad weather in the Midwest. A record drought to be exact.
Corn’s typical seasonal pattern shows a price peak in June. But that’s only if the harvestable crop size meets forecasts.
If bad weather reduces yield there’s often a sharp spike in prices in July. And that’s what we’re seeing this year.
U.S. consumers can expect to pay more for many food products and ethanol fuel because of these higher corn prices.
Our subscribers’ consolation prize? The agriculture/fertilizer company that we invested in back in February is up more than 19% since June 1.
If you haven’t done so already read the Survive & Prosper issue on “What Directly Effects Economic Activity and Capital Markets?”.
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