The price of corn is extremely sensitive both in supply and demand, which means that corn prices are highly volatile and can increase or decrease dramatically in a short time frame, explains Investopedia. To help maintain stability in pricing, commodity future exchanges, in which corn is traded as one of the grain commodities in futures contracts, impose basic price-change limits, notes the U.S. Grains Council.Continue Reading
Limits set by the commodity futures exchanges such as the Chicago Board of Trade restrict how much any commodity future price can increase or decrease in a day, according to the U.S. Grains Council. Corn generally has a basic price-change limit of 20 cents per bushel daily. However, exchanges can modify the daily limits on price movement if they determine such a change is needed by the market. For example, the Chicago Board of Trade's policy when a price limit is reached in one day is to increase the limit for the following three days.
In July 2015, the corn market prices quickly rose 53 cents in the first half of the month and then declined 51 cents in the following 10 days, reports Ethanol Producer Magazine. Common causes for corn price fluctuations include weather patterns, trade agreements and shifts in production, notes Investopedia.Learn more about Investing