As farmers harvested the largest corn crop in history this fall, prices fell to a five-year low, nearing $3.00 per bushel. Since then, bargain hunters swooped in, helping prices to bounce back, a welcome change for farmers.
Buyers were emboldened by a USDA report this week that showed a tighter global supply picture, primarily due to increased demand from end users like ethanol producers and poultry feeders. Meanwhile, some other producers, like Ukraine, have been having issues bringing their crop to the global market, giving a further boost to US corn prices.
These factors helped push corn prices as high as $4.07 on Friday, the highest price since mid-July.
Crude Gushes Lower
Crude oil prices continued drilling downward again this week, diving below $58 per barrel, the lowest price since 2009. Prices are sliding as global producers continue pumping oil at a record pace, led by recent production increases in Libya, Iraq, and the United States.
Rather than reducing output to help boost prices, producers like Saudi Arabia and Kuwait have been cutting prices in recent weeks in an effort to keep their customers happy. If some producers get desperate enough, they may actually increase production in an effort to increase income, which will only exacerbate the supply glut.
Longer-term, analysts expect that lower energy prices should stimulate demand and reduce output, which should stabilize prices. For the time being, the markets are continuing in a freefall, with crude oil dropping another $8 per barrel this week, which helped drag gasoline futures down by another 17 cents per gallon.
Coffee Grinds Lower
Just as drivers’ fuel costs are collapsing, so too is the cost of office workers’ primary fuel: coffee.
Prices are declining as much-needed rains fell in Brazil, the world’s largest coffee grower. A Brazilian drought had been threatening this year’s crop, but after recent rains, it appears that the world supply should be sufficient, especially with healthy crops in other major producing nations like Vietnam and Colombia.
After this week’s decline, prices were trading as low as $1.74 per pound, the lowest price since July.