A break for breakfast? Grain prices dive as supplies rise
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One less thing for consumers to worry about: Despite the jump in oil and prices of some other industrial commodities in recent months, there has been no repeat of the spring 2008 surge in grain prices to record highs.
In fact, just the opposite: Prices of wheat, corn and soybeans -- the world’s basic foodstuffs -- all have tumbled in recent weeks on expectations of rising supplies.
Today, corn prices are diving further after government data showed U.S. farmers have planted more than expected.
From Bloomberg News:
‘About 87.035 million acres were planted with corn, the U.S. Department of Agriculture said today in a report following a survey of farmers. That was up 2.4% from the March forecast on growers’ intentions and 1.2% higher than the 85.98 million last year. The average estimate of 24 analysts in a Bloomberg News survey was for 85.16 million acres. ‘The U.S. corn report showed ‘an awfully big acreage number and suggests inventories will be more comfortable,’ said Tim Emslie, a research manager at Country Hedging Inc. in Inner Grove Heights, Minnesota.’
Near-term corn futures in Chicago today have plunged the maximum daily limit of 30 cents, to $3.47 a bushel. The price has tumbled 23% from $4.49 a bushel June 2.
Wheat futures are down 17.25 cents to $5.11 a bushel today and have plummeted 24% from $6.74 a bushel June 2.
From Bloomberg:
‘About 13.77 million acres were seeded with spring wheat, the USDA said. That topped the 13 million projected by analysts surveyed by Bloomberg News last week. Total inventories on June 1 were 667 million bushels, doubling from a year earlier. ‘ ‘When given the opportunity and profit incentive, farmers will plant more acres,’ said Dan Basse, the president of AgResource Co. in Chicago. ‘Farmers changed their plans and seeded more acres in the western Midwest because of favorable weather.’ ‘
A year ago grain and bean prices were rocketing amid a general speculative frenzy for commodities. Corn sold as high as $7.88 a bushel last June. Wheat reached $12.82 a bushel in March 2008.
-- Tom Petruno