Corn Price Dynamics: Exploring Historical Trends and Futures

Corn prices have historically traded between $3.50 and $4.00, reflecting their cost of production since 2007, suggesting limited downside and potential for upward movements. The most recent downturn brings corn prices down towards these crucial levels again after having seen significant jumps in the past. Crude oil shows a similar trend, having doubled four times since 2006 when trading near its production costs of $35 to $50. Both commodities highlight a strategic position for investors as they often see significant price increases following drops to their respective cost of production. Price volatility for commodities like corn and crude can often be affected by external factors such as drought or geopolitical events, which have historically led to sharp increases. Relevant market players such as Kellogg's may hedge against these price fluctuations, but there's an inherent challenge due to the perishable nature of corn. The continual demand for corn ensures that any price declines are often short-lived, with past historical patterns reinforcing that future increases are plausible. If trends from 2007, 2010-2012, and recent geopolitical events are anything to go by, keen observers might find favorable conditions for investment if and when prices rebound.