Corn Futures Drop at Market Open on April 19, 2023

Apr 20, 2023

By Jean-Paul MacDonald,

Corn futures fell by 4% at the market open on April 19, 2023, marking a significant shift in agricultural markets. The decline was driven by a number of factors, including rising global grain supplies, reduced demand for corn-based ethanol, and uncertainty around trade policy.

One of the primary drivers of the decline in corn futures is the growing global grain surplus, which has put downward pressure on prices. Favorable weather conditions in major producing regions, such as Brazil and the United States, have led to bumper crops and increased supplies. This has made it difficult for corn prices to gain traction, despite strong domestic demand for animal feed and other corn-based products.

Another factor contributing to the decline in corn futures is reduced demand for corn-based ethanol. With the rise of alternative fuels, such as electric vehicles, demand for ethanol has been on the decline in recent years. This has put pressure on corn prices, which have traditionally been buoyed by the ethanol market.

Finally, uncertainty around trade policy has also contributed to volatility in agricultural markets, including corn futures. The ongoing trade disputes between the United States and China, as well as other major trading partners, have disrupted global supply chains and created uncertainty around future demand for agricultural products. This has led to increased volatility and risk in agricultural markets, including corn futures.

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