Wednesday, October 8, 2008

Corn Prices Move Up After Fed and Other Central Banks Cut Interest Rates

Corn for December delivery on the Chicago Board of Trade climbed by 10.5 cents Wednesday after the U.S. Federal Reserve and several other central banks around the world cut their interest rates. After the interest rate cuts corn did rebound settling at $4.275 a bushel on the CBOT, a 10.5 cent or 2.52 percent gain.

While many other commodities dropped, which temporarily made central banking officials feel good because of the usual response of inflation emerging from declining interest rates, corn was one of the few that responded in the positive as demand falls because of a variety of inflationary pressures.

Interest rates in the U.S. were cut from 2 percent to 1.5 percent in hopes of stimulating the economy. Other central banks working in unison with the Fed cut rates by half a percent as well.

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