Prices Soar on Crop Woes(U.S. Cuts Global Grain Supply Outlook)

WSJ ^ | 01/13/11 | SCOTT KILMAN And LIAM PLEVEN

[TigerLikesRooster]

JANUARY 13, 2011

Prices Soar on Crop Woes

U.S. Cuts Global Grain Supply Outlook; Higher Prices Expected at Grocery Stores.

By SCOTT KILMAN And LIAM PLEVEN

Evidence of tightening global food supplies grew as the U.S. Agriculture Department cut its estimates for global harvests of key crops and raised some demand forecasts, adding to worries about rising food prices.

Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.

The USDA's revisions reflect the impact of dry weather in South America and floods in Australia, which have compounded supply constraints that first started to emerge in the middle of last year, when a drought in Russia ravaged that country's wheat fields. The agency also cut estimates for U.S. harvests of corn and soybeans.

At the same time, demand is increasing. The USDA said ethanol producers likely will increase their use of corn, and consumption by emerging market countries continues to be strong.

[toast]

Not to worry, farmers will still be complaining about something or other.

Around here the only thing farmers can complain about is where they are going to put all that money.

[dynachrome]

You’re right. My dad was very angry about nixons’s wage/price freeze.

[Western Phil]

Yes, but he backed off. The others never did.

[Presbyterian Reporter]

Thanks for posting.

Obama has gotten a pass on the terrible economic news this past week due to the mainstream media murder blame game.

Rising grain prices are just one impact from printing funny money by the Federal Reserve.

[Mr. Lucky]

People are starving because they are deprived of corn starch?

[Vaduz]

Government owns 1/3 of the land in USA what are they growing on it?.

[kingpins10]

Congress could not spend like they do without the FED. Congress had restraint until 1913.

Without the Fed, the spending stops. Mr.Fisher is just as guilty.

[FromLori]

Personally I think the Fed should be abolished but the fact remains our politicians have failed us, they fail on spending and without raising the debt ceiling the Fed. could NOT monetize our debt and they fail on reigning in the Fed. I do view the Fed. as complicit however because they are scratching one another’s backs, i.e, bail outs.