Quote:
Originally Posted by Billyk
The cost of corn on the market has dropped $2.00 a bushel this month on the Chicago Board of Trade. Could it be due to drop of oil prices? Could it be due to readjustment of production and demand ratio? Oops, no evidence that ethanol or corn is in short supply. Could it be due to market speculation and abuse of the naked short selling rule?
Something tells me market speculation abuse is playing a much larger role in prices increases then it should be lawfully allowed to be.  |
Doesn't have to be in short supply to drive prices up... just needs more demand. Like I said though.... I think food cost increases have more to do with oil prices than anything. I agree by the way....I wouldn't be suprised if there is a WHOLE lot of speculation going on, just like for oil. As for adjustment of supply/demand.... Supply can only be "planned on" once a year. When you plant. Then its up to the weather.
The thing that bugs me is that even if we used our entire crop of corn for ethanol... we'd only replace about 12% of our gasoline usage. (thats from a national geographic article I read I believe but it might have been from NPR) We really need to be looking for something far more efficient than corn for making ethanol. Cellulose, switchgrass, etc. Right now the big push for ethanol production from corn has a lot more to do with the government bowing to special interests and the farm lobby than any realistic estimate of how much good it does for gas consumption. It helps... but I wish the government would invest a lot more on better answers.