Fourth of July, summer, and corn are the topic at hand. I don’t grill but I certainly enjoy corn from time to time and haven’t thought much about it until this holiday approached and boy is it in the news!
Aside from the grocery store ads and ever-rising prices on food items including those made from corn (tortilla chips, bourbon, Coca-Cola), I found myself going back to an old manual on commodity futures. I absolutely love watching commodity futures and can say that if I had not found this loved profession, I would likely have ended up on the floor of the Chicago Board Options Exchange (CBOE).
The trigger for this spot of heightened interest came from an article written by Hardika Singh in the Wall Street Journal Weekend Edition on June 25th.
“The price of ethanol, the corn-based fuel that is a common gasoline additive, has risen 14% so far this quarter, outpacing crude oil.” This is striking especially considering the impact the war in Ukraine is having and other global weather-related issues.
Approximately 1/3 of the crop in the U.S. goes to ethanol and the Biden administration stated ethanol could be a way to ease rising gas prices as the amount blended into gasoline could be higher. Well, that may not work very well and adds to the list of reasons that gas prices may not actually go down anytime soon. You can read the full article at: wsj.com and Ethanol Keeps Climbing as Gasoline Prices Stay High.
This brings my final thoughts back to reminding all investors that the best way to fight inflation is to own stock in quality companies that provide the goods and services we are spending our money on. Reinvesting those dividends and capital gains in down/volatile markets helps too. Every share acquired matters.