Corn Climaxes

Corn futures have jumped massively in recent weeks. It made fresh new high today. A record high price for corn is caused by fears of supply shock owing to (1) harsh weather condition and (2) very low inventory.

The USDA tracks the weather condition during the growing season on a weekly basis. According to the USDA, "excellent condition" has plunged to the lowest level ever.

Inventory has been plunging since 2009, thanks to a jump in usage of corn to make ethanol. In 2002, 10% of domestic corn production was used to make ethanol. In 2011, it has reached 40%, and it the amount was more than used for feedstock.