In an effort to avoid the tortilla riots of 2007, the Mexican government has been active in buying futures options to hedge their demand for corn. This could be a key reason for the renewed increase in price in December which has taken corn futures to above $6 a bushel.
Reported in Commodities Now and the Christian Science Monitor.
it is reported that most of ext year's crop demand has been bought through the ASERCA program which has grown to over $800 million from only $80 million in 2006. The ASERCA program provides subsidies for producers and the food industry to reduce volatility to the world price of commodities.
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