You got that exactly right. The artificial demand is government mandated ethanol requirements in gasoline. If it were simply speculation, then grain would be overflowing the silos as speculators bought grain that they cannot sell. Instead grain is being sent to ethanol plants to be burned as fuel.
There is no way in the world that ethanol would be used for fuel in cars if it weren't for government subsidies, tax credits or mandates. That's because it makes no sense economically.
There is only a tax credit for big oil and that should be
gone.Farmers get none of that. The gov mandate is
for oxygenators and we need them for cleaner emissions
to help cut air polution. My cars run great on 10%
blend, the V8s getting an extra mile per gal.
The other oxygenators cost more and big oil uses
them, and they are cancer causing. About speculators-
What they’re doing is buying and selling for quick profit, and they are drawing in more investors with
rumors, etc, of always greater shortages and rising prices.
Relative to money in oil or gold speculating, corn is
small volumne and the extra push of money has geometric
affect on prices. Reason- we have about 13-15 billion
bushels of corn a year, where say in oil we have that
many gallons in 12 days, so the speculation pressure
affects corn so much more, as it is relatively small
compared to oil, gold, bonds,etc. The speculators don’t
buy grain to sell to ethanol plants, or food processors,
they just buy a block of it to sell to the next speculator,
for quick profit,and the actual processor forced to pay
someone in actual physical control the price set by
the speculators. And at no time, so far, has there been
a shortage of corn, for the board of trade to have, to
put up blocks of it to speculate on. Think about it.....
they haven’t run out of any to speculate on.......
so there is no shortages....just prices driven up by
a lot more money speculating......Ed.