Decrease in supply and demand

Assignment Help Macroeconomics

Reference no: EM1316201

Illustrate a supply or demand curve shift for the following article...(make only one shift)

U.S. Data Sink Corn, Soybeans

The majority of grain and oilseed futures are traded on the Chicago Board of Trade (CBOT). Government estimates released on Monday, January 12, 2009 sent CBOT grain and oilseed futures plunging amidst concerns regarding the world-wide recession. Both corn and soybean markets fell - the March corn fell 30 cents to $3.8075 per bushel while January soybeans fell 83.50 cents to $9.54 per bushel. Analysts had expected corn and soybean production to drop because of a late harvest. The demand for both is down because of the global economic recession.

The greatest use for corn is feed for livestock including cattle, hogs and poultry. Corn is also processes into everyday food items like corn oil, cornstarch and corn sweeteners. Non-food uses include alcohol for ethanol, absorbing agents for disposable diapers and adhesives for paper products. Soybeans have a wide range of uses from food to feed to industrial products. Bio-diesel fuel is becoming an important new source of energy and soybean oil is the primary component. Any weather problem will reduce potential yield for corn and soybeans. The market needs a boost to compel farmers to plant more corn and soybean acres this year.

Reference no: EM1316201

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