In the list of current catastrophic scenarios, one more addition is in the price of Corn reaching new lows from time to time in its one of the most important trading avenue Chicago Board of Trade (CBOT).
Ethanol market, Chinese demand, crude oil prices, climate & US dollar govern the price of corn worldwide as we know global circumstances are not supporting any of the mentioned factors which resulted in settlement of corn futures at $3.34 in April to $3.19 a bushel in May in CME.
The reason for the downfall is a decline in sales in the gasoline market due to movement restrictions. In this interlinked situation, the weak demand for gasoline which has 10% ethanol content pushed the cost of the latter to record lows as ethanol is commonly made from corn its prices also came to the picture which dropped to 4 years low recently.
Corn is one of the majorly produced and exported crop in the US, roughly 40% of it is used in ethanol production.
Retail gasoline sales are severely down from last year, some distilleries that produce ethanol have shut down completely. Usually, its addition brings gasoline prices lower but this time in reverse the prices were increased and demand went down.
If it reaches below $3 that would be the lowest since 2007. Farmers are majorly impacted because this year US-China deal would have taken place which required huge export of commodities, corn being among them but on the flip side, this was the result. The yields are sufficient but because of fewer usage farmers are coping with the circumstance hoping to see the better situation shortly.