In this sense, in the U.S. – the largest provider of corn – demand for this cereal to produce ethanol is gradually absorbing the export balance, clearly tightening global supply. In Europe, biodiesel shows the same behavior, although feedstock is more diversified, just like the case of ethanol, which is produced mainly from wheat.
Nevertheless, subsidies to biofuel development are a central issue given the distress caused by the worldwide surge in food prices. Finally, another phenomenon adding uncertainty is the fact that these commodities are now considered a financial asset class. The interest they arouse in investors may be due to the fundamentals of physical markets still dominating the trend.