From CNBC: The worst fears for the U.S. corn crop are being
realized, as the government now expects the lowest yield in 17 years and a
total crop about a third smaller than what was projected at the start of the
growing season.
With corn prices at a record, the shrinking crop has
significant implications for global food supply and consumers, as the livestock
industry, food processors and ethanol producers respond to less supply at
higher prices. New crop (December) corn futures hit a high of $8.34 per bushel
overnight, and corn has increased nearly 50 percent since the beginning of
June. On Friday, corn was trading off its highs in late morning, and soybean
prices were up about 1.5 percent.
"We had our second worst drought in almost 30 years
this year. The market's reacted and the market will be able to recover and get
back to normal pricing but not until the middle of next year," said Rich
Nelson, director of research at Allendale. "For the general consumers, (it
means) higher meat prices, higher dairy and higher egg prices…."
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