We end the month of June, the second quarter of 2011 and the first half of 2011 on a very positive note. At mid-day, corn futures were off 10% today. Speculators have bid corn prices up steadily since this time last year. As global crises provided upward pressure in oil prices, the prices of corn (used in domestic U.S. ethanol) have moved higher. Some of these positions unraveled today as a report cited greater planted acreage.
Earlier this month, corn futures peaked. The correction could wipe out the entire gain in prices for the year if the sell-off continues.
If restaurants leave menu prices alone, the lower corn prices should produce fatter gross margins.
The move lower has also produced a drop in wheat prices. These welcome price drops provide a bit of positive momentum as the industry continues the consolidation begun 3 years ago.
